The good news for advisors, however, is that this segment of unprepared pre-retirees is open to advice and assistance for planning. Three-quarters of them report needing some form of financial guidance. Specifically, they are looking for help with:
- Developing a retirement income plan (31 percent);
- Choosing specific investments (36 percent);
- Assessing an overall financial plan (30 percent).
“Having confidence in their retirement savings may result in faculty members who are approaching retirement age not taking the time to create a retirement income plan, leaving them without a strategy to convert savings into lasting income,” said Rick Mitchell, executive vice president, Tax-Exempt Retirement Services, Fidelity Investments. “It’s critical that pre-retirees understand how long-term savings can be transitioned into retirement income. Higher education employees value education and the opportunity to learn, so it’s no surprise that they are asking for help.”
The report also found that older faculty, unlike their younger colleagues, are more likely to rely on guidance from an advisor (59 percent versus 37 percent). Other findings include:
- 54 percent of pre-retiree faculty members are confident they will have enough money to pay for medical expenses in the future;
- 72 percent of pre-retirees say it’s important for an institution-sponsored faculty retirement program to offer retiree health care benefits;
- 60 percent of older faculty members who currently have an institution-sponsored retirement incentive program think it’s important to the health of their institution;
- 83 percent agree they would appreciate it if their institution offered assistance for the transition to retirement.
Like many reports, this study shines a glaring light on the financial underpreparedness of those nearing retirement age, but, through the suprising statistics, it also offers an opportunity for the financial planning industry.