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Do You Have a Retirement Income Plan? Most Retirees Don’t

Posted by Seton McAndrews | CFP®, Vice President Investments
October 11, 2017

Do-You_have_a_retirement_income-plan.pngThe key word in the title of this article is “income.” Many retirees believe they may have a retirement plan (at least generally speaking), but when it comes to having a retirement income plan, the numbers don’t look so good.

According to new research from LIMRA Secure Retirement Institute, “only 35% of retired clients and 38% of pre-retirees who work with an adviser have a formal written retirement income plan (emphasis ours).”1

Do you have one?

Not having a formal, written retirement plan and retirement income plan may decrease the confidence many retirees feel about having enough money in retirement. Unfortunately, with decades of retirement education and growth in the advisor business, retirees are not getting much more confident about retirement security. According to the Employee Benefits Research Institute, in 1993, only 18% of workers felt “very confident” about being able to afford a comfortable retirement. Fast forward to 2016, and there are still only 18% of workers who feel “very confident.”2

When considering that the Dow Jones Industrial Average has risen more than 500% over the period from January 1993 to December 2016, one would think that retirement confidence would be higher. But something is clearly amiss.  

What Retirees are Missing

What could be amiss is that folks are not creating detailed plans for retirement. When that happens (or rather, fails to happen) there is no roadmap to help navigate the world of saving and investing. There are no checkpoints to make sure you are on track to reach your goal. There is no advisor there to help you know what changes to make, and when to make them.

For the workers and retirees who do create retirement income plans, they are oftentimes doing so late in life. Two separate LIMRA Secure Retirement Institute studies found that 38% of retirement income plans were created at ages 60, 62, and 65. Late is very much better than never in this case, but it will take some work to ensure all retirement goals are met when starting that late.

Another issue is that many retirees may feel overwhelmed by the complexity and vast menu of investment options available to them. Over the last twenty years or so, the financial services industry has introduced dozens – if not hundreds – of new investment products and savings vehicles. The list includes ETFs, health savings accounts (HSAs), Roth 401(k)s, a dozen different types of annuities, reverse mortgages, etc., etc.

The list goes on for pages and will likely continue to grow as ‘financial engineers’ devise new ways to save for retirement. Many of these new products, savings vehicles, investments are designed to help and give retirees flexibility, but they may also have the unintended consequence of confusing and complicating matters even more for folks trying to navigate the retirement and retirement income puzzle.

WrapManager Can Help You Navigate Retirement – And Create a Plan

The wealth managers at WrapManager work with our clients to create retirement investment plans that include factoring items like retirement income and long-term goals. We believe that creating a formal plan that we review with our clients every quarter will allow us to help our clients achieve their long-term objectives, and we can use the plan to help ensure we remain on track.

If you do not have a formal, written retirement plan or investment plan, contact us today so we can help you build one! Getting organized and making a plan is a great first step, and we can help you get there. Reach out to us at 1-800-541-7774 or get started over email at wealth@wrapmanager.com.


1. Investment News

2. Marketwatch 


Retirement Planning Retirement Income Strategy