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LIMRA: Pre-retirees who work with advisors do more planning

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Pre-retirees who work with an advisor are more than twice as likely as those without one to have accomplished some financial planning activities, new research shows.

LIMRA, Windsor, Conn., released this finding in a summary of results from a new survey, “The Pre-Retiree Market: Surveying the Landscape.”

The report shows that 61 percent of pre-retirees who work with advisors have calculated the amount the amount of assets and investments available to spend in retirement. This compares with less than one-third (32 percent) of pre-retirees who don’t work with an advisor.

Large percentage gaps also separates retirees who have determined what their income will be in retirement (57 percent who work with advisors versus 44 percent who don’t) and determined what their expenses will be in retirement (51 percent versus 36 percent).

Similarly, 48 percent of pre-retirees who work with an advisor have estimated how many years their assets and investments will last in retirement, as opposed to 23 percent who do not work with one. And 37 percent of advisor-affiliated pre-retirees have identified the activities they plan to engage in and their likely costs, versus 26 percent of pre-retirees who are without an advisor.

The report also reveals that only 48 percent of U.S. pre-retirees (non-retired individuals, ages 55-70) believe they will be able to live their preferred lifestyle in retirement.                                     

Formal, written plans that manage income, assets and expenses during retirement are not common, the survey finds. Only 15 percent of all pre-retirees have a formal written retirement plan.

Even among pre-retiree households with higher household incomes, just about half have such plans in place.  Meanwhile, 62 percent of pre-retirees working with an advisor have written retirement plans.

Both advisors and pre-retirees agree that creating an income plan and minimizing the risk of running out of money are critically important, the survey shows.

These results align with findings from LIMRA’s study of recent deferred annuity buyers.  According to the 2012 study, the majority of recent deferred annuity buyers said the two most important reasons they bought an annuity were to facilitate retirement planning and to ensure their assets lasted throughout their and their spouses’ retirements.


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