The study – Visions of an Ideal Retirement, conducted by American Express Financial Advisors – shows that those who seek help from a financial advisor save nearly twice as much on average and are overall less worried and anxious about retirement. The study looked at baby boomers between 40 and 63 who were considered affluent – defined as having annual income of over $75,000.
When comparing those who are advised to those who are, stark contrasts can be drawn. The advised group expects to need $2.5 million to maintain their current lifestyle in retirement, and have, on average, saved $1.8 million. The unadvised group expects to need more – $3.5 million, on average – but has saved less (on average, $950,000). According to Congressional Budget Office estimates, the advised group is more on target with their retirement-need projections.
Advisors also seem to take the anxiety out of retirement planning. Those without financial advisors, the study shows, are 63% more likely to be uncertain about their retirement. This group is also twice as likely to expect to work in retirement out of necessity and not want, according to the study.
Boomers preparing for retirement have different preferences than their parents did, according to the study. Boomers see their upcoming retirement as a time for learning and self discovery (85%), reinventing themselves (65%), and a new beginning (51%). Ninety percent see it as a new phase for personal growth and development, as well. However, 60% plan to work in retirement because they want to, not because they have to. This is sharply different from their parents: 57% of Boomers’ parents did not work in retirement.
Boomers are not overwhelmingly prepared for retirement however, the study concludes. Seventy-five percent say they could learn more by talking with others. However, 79% admit they do not have a role model when it comes to this upcoming event.
American Express, has set up a Web site – www.getadvice.com – to help individuals with retirement issues.
The study was conducted with 541 advised and 785 non-advised future retirees.