Older Workers Often Skeptical of Professional Retirement Advice, AARP Finds

Many workers aged 50 or older prefer to handle retirement planning themselves, and a relatively large number are skeptical of working with a financial professional on their post-work finances, according to a survey released Tuesday from the AARP.

Among those who had never used a financial professional to help plan for retirement, 41% said the reason was that they preferred to handle retirement planning themselves or, if married, to give the responsibility to their spouse. Other barriers to using a financial professional included not having much retirement savings (35%), thinking they could not afford a financial professional (30%) and not knowing if they could trust a financial professional (20%).

Furthermore, a majority of those surveyed said they expect financial advice to be made in their best interest only, according to the retirement advocacy group.

“Of those who have either already used a financial professional for retirement planning or expect to use one, roughly nine in ten (89%) say that they expect professional financial advice to be in their best interest, and a similarly large share (87%) say that they use professional financial advice to make important financial decisions,” wrote S. Kathi Brown, of AARP Research, in a piece about the study.

Among that group, only 3% expected the advice would not be in their best interest, and 7% did not know of it would or not.

The research comes even amid widespread debate about the Department of Labor’s retirement security proposal that would tighten standards on financial professionals advising on 401(k) rollovers into IRAs, as well as on selling retirement income annuities. Just last Tuesday, the comment period for the department’s proposal, also known as the fiduciary rule, expired amid a slew of responses both from those dissenting and from those agreeing with the move.

The AARP examined how survey participants felt about the new rule, providing this prompt: “This rule says that, when giving investment advice to people with retirement savings accounts, financial professionals must give advice that is in the best interest of the account holders. To what extent do you agree or disagree with this rule?” Answers varied between strongly agree (66%), somewhat agree (24%), somewhat disagree (4%) and strongly disagree (5%).

Among those surveyed who have used a financial professional to help plan for retirement, a significant percentage of respondents (43%) did not know if their professional was required by law to give advice that was in their client’s best interest. More than half (53%) said yes, their financial professional was required to meet best-interest standards, while 4% said the financial professional was not required to.

For the group that has used a financial professional for retirement planning, the majority do trust the guidance of their advisers, with 87% saying they used the advice to make important financial decisions; only 3% reported they did not.

The AARP’s research was fielded from December 7 to 11, 2023, among 1,0002 adults ages 50 and older.