Data & Research July 26, 2016

Social Security is Key, Even for Affluent Investors

For nearly one-third of affluent investors, Social Security will provide half their retirement income, according to a study.
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Social Security is critical for retirees, even for affluent investors age 55 and older, Spectrem Group found. For nearly one-third of those with a net worth between $100,000 and $1 million, Social Security will provide half or more of their retirement income, according to the research firm.

Sixty-three percent of affluent Americans think there shouldn’t be an income limit to receive benefits, and 79% of those with a net worth of $5 million or more are opposed to means-testing.

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Only 31% of all investors have discussed Social Security with their adviser, and that decreases to 24% for investors with a net worth between $100,000 to $1 million. “With a sizeable portion of investors relying on Social Security income in retirement, and an array of options for when to begin receiving benefits, advisers must help clients navigate the program,” Spectrem Group says.

Spectrem’s findings are based on a survey of 634 people this past February.

Data & Research July 26, 2016

Targeting Demographic Groups Pays Off

Younger people are mostly focused on matches, while older folks concentrate on distribution options.
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Age-specific strategies to reach retirement plan participants, rather than a one-size-fits-all approach, is the most effective method for plan sponsors to help participants become retirement ready, OneAmerica found through a five-month analysis of 10,500 visitors to its participant website.

Between September 2015 and January 2016, 29% of people between the ages of 18 and 34 visited the OneAmerica participant website, as did 25% of those between the ages of 35 and 49, and 36% of those 50 and older. Twenty-three percent of those younger than 35 think about retirement every week, compared to 27% of those ages 25 to 49 and 45% of those 50 and older.

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Forty-eight percent of those 50 and older monitor their retirement plan at least once a month, followed by 44% of those younger than 35 and 40% of those ages 35 to 49. Fifty-five percent of those 50 and older say it is very important to track their retirement plan status, compared to 49% of those in the 35 to 49 age bracket and 47% of those younger than 35. Participants 50 and older are most interested in retirement plan investment and distribution options, while those younger than 35 concentrate mostly on employer matches.

“To reach employees, plan sponsors and financial professionals should create targeted communication strategies that factor in age demographics,” says Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica. “Segmenting employee populations by age could be an effective way to provide more personalized and effective messaging, because respondents show variations in retirement planning triggers, potential roadblocks and preferred communications by age.”

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