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Retirement Planning > Saving for Retirement

Investors Don’t Seek Help With Difficult Financial Tasks: Study

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The vast majority of consumers who find a financial task difficult don’t seek help, as seen in a new report from Hearts & Wallets.

According to the report, that creates large advice gaps for tasks like planning for retirement, choosing investments and managing the finances of loved ones as they age.

The report reveals the most pressing pain points that face different groups of consumers. The report specifically looks at retirees, pre-retirees within five years of retirement and “accumulators,” or consumers still focused on working and saving.

“Choosing appropriate investments” is a top pain point for all consumers, including 57% of accumulators, 43% of pre-retirees and nearly a quarter (24%) of retirees.

The report asked slightly different questions for each consumer group, based on their being retired, getting ready to retire or still in the working phase of life.

For retirees, one of the top pain points was determining appropriate levels and types of health insurance, where 26% said they had a difficulty of 6 to 10 on 10-point scale. The other top pain point for retirees was estimating or budgeting spending in retirement (26%).

For pre-retirees, determining the appropriate health insurance was also a top concern. About 44% said they had a difficulty of 6 to 10 on 10-point scale with this task. Estimating spending in retirement was also a top pain point for pre-retirees with 43% saying so.

Meanwhile for those still working, or accumulators, 59% indicated retirement planning, including how much to save for retirement, was a major pain point for them.

The other major concern for them was identifying the year they might stop working full time, with 53% saying this.

“Financial tasks can be hard,” Laura Varas, CEO and founder of Hearts & Wallets, said in a statement. “Consumers get confused or default to inertia because they don’t understand which solution out of the wide range of offerings in the marketplace fits their specific needs. Firms can personalize products and advice to support consumers. A framework that helps consumers to better understand their options and to make informed choices is also important.”

While it’s clear there are many financial tasks these consumer groups deem difficult, many are not seeking help.

According to the report, of the 59% of accumulators who have difficulty with retirement planning, only 16% have sought help. And of those who don’t know when to stop working full time, only 9% have asked for help.

Meanwhile, among the 39% of pre-retirees who have difficulty with “developing a strategy to withdraw income from multiple accounts during retirement,” the study finds that only 11% have sought help.

The report, “Pain Points & Actions: Insights to Address Large Advice Gaps by Reaching Consumers with Unmet Needs,” is an insight module drawn from the latest fielding of the Hearts & Wallets Investor Quantitative Database (IQ Database). The IQ Database is one of the largest single datasets on U.S. retail consumer attitudes, behaviors and buying patterns with over 46,000 U.S. households.

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