Advisers Play a Key Role in Estimating Monthly Income in Retirement

Voya Financial research found several ways that people who work with a financial adviser can better prepare themselves for retirement.

According to Voya, 94% of those who work with an adviser feel they have prepared themselves for estimating their monthly retirement income needs. By comparison, 42% of those without an adviser do not feel prepared at all.

Eighty percent of those with an adviser feel at least somewhat prepared when it comes to estimating health care costs in retirement. Forty-eight percent of those without an adviser do not feel prepared on this point at all.

Fifty percent of those with an adviser are planning to learn more about calculating their expected monthly living expenses at least five years before their target retirement date. By comparison, only 39% of those without an adviser plan to make the same calculations, and 19% of this group plan to wait until the year they retire to estimate these expenses.

Seventy-six percent of people with an adviser plan to adjust their investments before retirement, whereas only 35% of those without an adviser plan to do the same. Forty percent of those with an adviser plan to adjust their investments with a focus on protecting their assets, compared with 18% of those without an adviser.

Fifty-seven percent of those with an adviser feel confident they will know when to withdraw money from a retirement plan without incurring penalties for withdrawing too early or too late; this is true for only 22% of those without an adviser.

Forty-six percent of those with an adviser feel prepared about making decisions related to catch-up contributions. By comparison, 53% of those without an adviser do not feel at all prepared about making this decision.

Eighty-three percent of those with an adviser have given thought to how they will want to spend their time in retirement, compared with 56% of those without an adviser. Ninety-two percent of those with an adviser think they should think about housing in retirement, compared with 78% of their peers without an adviser.

Twenty-six percent of those with an adviser have saved money to cover housing or eldercare, or they have purchased a product like long-term care insurance. Only 9% of those without an adviser have taken these steps.

“Americans are all very focused on that magic number—the amount you need to save to maintain your lifestyle in retirement—but there are many important aspects of financial planning beyond the financial,” says James Nichols, senior vice president of Voya Financial’s Customer Solutions Group. “Advisers help clients take a broad view of their retirement and prepare for a fulfilling life when they stop working. This process includes discussions about how they will fill their days with activities and where they might want to live.”

Nichols adds, “When asked what aspects of retirement they wish they had spent more time considering, the majority of retirees said calculating monthly expenses and estimating their retirement income. These are two areas where individuals working with an adviser feel far more prepared than those who had not.”