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Editorial Comment: Worth Mulling Over

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Here is a research finding that might make income planners gulp. In a recent survey, Thrivent found that 94% of adults ages 60 to 74 who did not work with retirement income professionals said they weren’t interested in having professionals guide them on how to manage their money or draw money from their retirement nest egg (see our brief report on this here).

The researchers sampled views of 80 adults, and only 22% said they had discussed retirement income planning financial planners.

This brings up many questions: does the survey group represent a broad cross-section of American retirees? Does the polled group have traditional defined benefit pensions as well as Social Security? Are the non-interested people well-off enough to need income planning? Have the uninterested ever worked with financial professionals? Have people in the satisfied group worked with their advisors for a long time? Does the satisfied group fit any identifiable demographic that would predispose them to consult with financial advisors?

Still, the finding that so many people expressed disinterest in retirement income planning is arresting.

After all, the financial services industry is gearing up for a major influx of baby boomers onto the retirement income planning shores. Substantial industry research has documented the need for professional assistance, and some early players in this market say sales demonstrate that boomers do act on this need.

So, then, how to make sense of the Thrivent findings?

The findings no doubt reflect the general lack of awareness about retirement income planning-what it is, why it is, how it works, and especially how it can help people have a comfortable retirement. Since lack of familiarity often breeds distrust, it should come as no surprise that some people don’t want professional help in this area.

It may also be that people in the sample group are already fixed in their retirement income approach and so see no need for outside help now. They are, after all, ages 60 to 74. A younger survey group may reveal different results.

It’s also likely that some in the uninterested group may be more reluctant than disinterested. That is, they may refuse professional help because they don’t want to pay the associated fees or because they believe they cannot afford those fees. This is a common pattern with people who want but do not pay for professional assistance with, say, their income tax returns; it’s only reasonable to expect some people will respond the same way to the idea of retirement income planning.

A related factor is that some individuals may be uninterested in income planning because they do not see a cost/benefit relationship between what they pay and the results they will get. This is probably exacerbated by the lack of education and awareness about income planning, as mentioned earlier. It might help if advisors and providers were to make readily available some simple examples of the various benefits.

Finally, at least some of the disinterested folks are probably people who don’t plan for anything, let alone retirement; and/or who won’t let a professional help them plan because they believe they are capable of doing it themselves. A clear depiction of what planning does-and does not-do might help some of these people get a better understanding.

What to do with the uninterested prospect? Some advisors say they move on to planning topics that do interest the client. Many say they do try to provide retirement education and information, but only if the person is willing to listen. Some just say, “some dogs won’t hunt,” period.

Still, the question is worth mulling over. One other finding from the Thrivent survey makes that point clear: of the 22% of older adults who did speak with a professional about income planning, 94% said they found the experience helpful.


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