For participants who think less than 75% of their salary in retirement is enough, show them the numbers.
Our plan participants sit dutifully through your sessions,
ask questions, and then head off to plan their retirements. For you, a veteran
retirement advisor, the retirement benefit landscape is familiar territory. For
your participants, it might as well be the surface of Mars.
So it’s no surprise to see results from a J.P. Morgan survey
that reveals most employees (76% of those asked) say they need professional
help in the retirement planning process, particularly when it comes to savings
and asset allocation. It’s also not shocking to learn that 53% thought they’d
need less than 75% of their pre-retirement salary, and that just 13% believe
they’re on the right track.
Retirement advisor, here is your opportunity to build
relationships and become that trusted source for plan participants. Some of the
ways you can help plan participants improve their retirement investment results
Finding the target.
Four in ten employees surveyed say they don’t have a specific target for
retirement savings. Give your plan participants sensible formulae for coming to
that number. Are they saving now? What other investments are there? Do they
have a mortgage, college expenses, or obligations to parents or children? A
questionnaire can help them uncover a more precise picture of what they’ll need
Showing, not telling.
For participants who think less than 75% of their salary in retirement is enough,
show them the numbers. For an employee going from making $4,000 a month to making
$2,000 a month, that may be too much of a decline, particularly if the employee
has visions of traveling or buying a second home.
Helping plan participants understand how different types of asset allocations
will impact their total savings over time is one of the best ways to empower
your participants to grow their investment portfolio the way that aligns with
their goals. Use simple examples of different allocation approaches showing
both conservative growth and decline scenarios.
unexpected. One element that many plan participants fail to factor into
their retirement investment decisions is the unforeseen event. The death of a
spouse, the chronic illness of a parent, partner, or child, the loss of the
ability of one partner to earn, or the loss of a job or savings can have devastating effects on a retired
The same survey shows that less than 30% of respondents are sure their savings
will last throughout retirement. By giving your plan participants the tools to
take control of their investments, you’re delivering confidence. A participant
who understands how each piece of their retirement portfolio operates and how
outside forces can impact their investment will be more confident in the
decisions they make.
Retirement plan advisors who take the time to assist their
plan participants in the retirement planning process not only improve plan
results, but also build loyalty and satisfaction among the plan’s participants
What methods, tools or resources do you use to help your participants understand their options?
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal