It is never too early to begin discussing retirement plans with clients, but many clients may be reluctant to begin the conversation because they just don’t know what to ask. Younger investors are certainly in that position, while older ones who have retirement questions may be concerned that they are asking their questions too late or are inadequately prepared financially to have a conversation about retirement funding and planning. 

Which is why investors today take advantage of the information available to them online. And one such information source is tools financial providers offer to inform and assist investors on matters which can be handled relatively simply, including initial retirement planning. 

Spectrem’s newest study in its DC Participant Insight Series – Using Social Media and Technology in Financial Decisions – asked investors to indicate their interest in numerous online tools which would provide initial benefit for financial planning.  The tool most popular among those investors was a retirement planning tool. 

Such tools - which offer guidance and details about the amount of money a client needs in retirement, an examination of their 401(k) accounts, their prospective Social Security earnings, and a calculation of retirement tax costs – received a score of 49.11 on a 100-point scale of interest among all investors. That mid-point response level shows that there are investors who have great interest in such a tool but they are balanced by those who do not want to calculate retirement finances yet, or do not want to do it online.  

The benefit of providing an online retirement tool to clients is that they can examine their retirement preparedness at any time, without requesting that information from their advisor. Then, when they see the current state of their retirement accounts and plans, they can ask directed and specific questions of their advisor at the appropriate time. 

When investors in the Spectrem DC study were segmented, the greatest interest in an online retirement planning tool came from Millennials (55.35) and Baby Boomers and World War II investors (54.09), as well as investors with at least $50,000 in their defined contribution plans. In fact, the interest in an online retirement planning tool was greatest among those with $50,000-$100,000 in their retirement plan.  

The challenge for advisors discussing retirement plans with nervous clients is to provide guidance without creating concern that clients have either started too late on retirement planning or are not going to be able to live as they want to based on their current retirement income. Solutions, both sizable and incremental, can be provided to encourage clients to concentrate on their retirement planning as soon as possible, no matter how old or affluent the client is.  

 

 

 

©Spectrem 2020

 

Keywords: retirement, budgeting, online, tools, investors, advisors, defined contribution, Spectrem