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Retirement & Funding

Ideas for Enhancing Advice as Income Sources Evolve and Target Dates Move Younger

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Order Report - Retirement & Funding : Ideas for Enhancing Advice as Income Sources Evolve and Target Dates Move Younger

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Report Overview

The past year has many investors rethinking their plans. This report explores changes in target retirement ages; aspirations and reality for income replacement rates and the importance of advice; anticipated sources of retirement income for those approaching retirement compared to actual sources for those already retired; and a profile of the "Aspire to Retire by 55" group.

Key Findings

  • Even as more households want to “work full time as long as health permits,” target retirement dates are moving younger. 
  • Ambitions for replacement rates have increased, but assets-to-income ratios show most people are still very unprepared for the end of full-time work. 
  • Future retirees anticipate combining more sources of income than current retirees. The more income sources consumers have, the more value they see in paying for advice. 
  • More households report participating in an employer-sponsored retirement plan. More generous matches increase overall household saving rate, especially at lower income levels. 
  • There are about 11M households in the “Aspire to Retire by 55” design target. Well positioned in some ways, these households need help to achieve this goal.

How This Report is Helpful

This briefing will be especially helpful to people working on workplace advice, institutional retirement plans, IRA or rollover product management and financial planning. 

Pricing

Choose access licenses for your team or organization in ways that support how you collaborate. AVAILABLE FOR LICENSE TO NON TRENDS SUBSCRIBERS MARCH 17, 2021

Online with slide download, PPT & PDF (unlimited log-ins) - $15,000
Online with slide download (1-50 logs-ins) - $9,500
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Sample Report Pages

This new 76-page report features 50 data-intensive exhibits.

Table of Contents

Executive Summary

Methodology

2-3

Key Findings and Implications, Favorite Statistics, Related Research

7-13

Key Finding #1: Even as more households want to "work full time as long as health permits," target retirement dates are moving younger.

Exhibit 1.1 — Vision for Work-Life Balance as Older Adult: National, by Year

14

Exhibit 1.2 — Crosstab of Vision for Work-Life Balance as Older Adult by: Anticipated Retirement Age – Breadwinner: 2020

15

Exhibit 1.3 — Lifestage Composition Within Breadwinner Age Groups: 2020

16

Exhibit 1.4 — Age Group Composition of Pre-Retiree Breadwinners: by Year

17

Exhibit 1.5 — Anticipated Retirement Age: by Year

18

Exhibit 1.6 — Lifestage Composition Within Breadwinner Age Groups 45-54 and 55-64: by Year

19

Exhibit 1.7 — Anticipated vs. Actual Age of Breadwinner Retirement: by Year

20

Exhibit 1.8 — Work Viability Reported by Post-Retirees vs. Anticipated Work Viability of Not Yet Retired Households: 2020

21

Exhibit 1.9 — Anticipated Retirement Age of Breadwinner by: Anticipated Work Viability: 2020

22

Key Finding #2: Ambitions for replacement rates have increased, but assets-to-income ratios show most people are still very unprepared for the end of full-time work.

Exhibit 2.1 — Anticipated Income Replacement Rate: by Year

23

Exhibit 2.2 — Anticipated vs. Actual Income Replacement Rate: by Investable Assets, 2020

24

Exhibit 2.3 — Assets-to-Income Ratio: by Lifestage, 2020

25

Exhibit 2.4 — Assets-to-Target/Actual Retirement Income Ratio: by Lifestage, 2020

26

Exhibit 2.5 — Actual Income Replacement Rate by Reported Work Viability Segmentation: Post-Retirees, 2020

27

Exhibit 2.6 — Assets-to-Target/Actual Retirement Income Ratio by Reported Work Viability Segmentation: Post-Retirees, 2020

28

Exhibit 2.7 — Crosstab of Assets-to-Income Ratio by Feelings About Financial Security: Non-Pensioner Post-Retirees With $100K+, 2020

29

Exhibit 2.8 — Assets-to-Target/Actual Retirement Income Ratio by Store: 2020

30

Key Finding #3: Future retirees anticipate combining more sources of income than current retirees. The more income sources consumers have, the more value they see in paying for advice.

Exhibit 3.1 — Count of Actual Sources of Income in Retirement: by Year

31

Exhibit 3.2 — Average Count of Actual Sources of Income in Retirement: by Investable Assets, by Year

32

Exhibit 3.3 — Count of Actual Sources of Income in Retirement: By Investable Assets, by Year

33

Exhibit 3.4 — Count of Actual Sources of Income in Retirement by Store: 2020

34

Exhibit 3.5 — Actual Sources of Income - Incidence of Each Source: Post-Retirees, by Year

35

Exhibit 3.6 — Actual Sources of Income in Retirement - Employment Income: Post-Retirees, by Year

36

Exhibit 3.7 — Actual Sources of Income in Retirement - Real Estate Income: Post-Retirees, by Year

37

Exhibit 3.8 — Count of Anticipated Sources of Income in Retirement: by Year

38

Exhibit 3.9 — Average Count of Anticipated Sources of Income in Retirement: by Investable Assets, by Year

39

Exhibit 3.10 — Anticipated Sources of Income in Retirement - Incidence of Each Source: by Year

40

Exhibit 3.11 — Anticipated vs. Anticipated Sources of Income in Retirement: by Year

41

Exhibit 3.12 — Anticipated vs. Actual Sources of Income in Retirement: Components of Income From Investable Assets, by Year

42

Exhibit 3.13 — Anticipated Sources of Income In Retirement - Average Percent of Income From Withdrawals From Taxable Accounts: by Year

43

Exhibit 3.14 — Crosstab of Count of Anticipated Sources of Income in Retirement by Attitude "I see value in paying for professional financial advice, whether or not I use a financial advisor today," 2020

44

Key Finding #4: More households report participating in an employer-sponsored retirement plan. More generous matches increase overall household saving rate, especially at lower income levels.

Exhibit 4.1 — ESRP Eligibility & Participation in Household: by Year

45

Exhibit 4.2 — Crosstab of Vision for Work-Life Balance as Older Adult by ESRP Eligibility & Participation: 2020

46

Exhibit 4.3 — Annual Saving Allocation for Account Type ESRPs: 2020 vs. 2019

47

Exhibit 4.4 — Compare All ESRP Reasons for Participating by Levels of Importance on 10-Point Scale, 2020

48

Exhibit 4.5 — Compare All ESRP Reasons for Participating: 9-10 Importance on 10-Point Scale, by Race, 2020

49

Exhibit 4.6 — Compare All ESRP Reasons for Participating: 9-10 Importance on 10-Point Scale, by Annual Household Income, 2020

50

Exhibit 4.7 — ESRP Reasons for Participating: To Benefit From Tax Deferral, 9-10 Importance on 10-Point Scale, by Income and Generation, 2020

51

Exhibit 4.8 — ESRP Reasons for Participating: Ease of Payroll Deduction, 9-10 Importance on 10-Point Scale, by Education Level, 2014 & 2020

52

Exhibit 4.9 — Crosstab of ESRP Company Match by Annual Household Saving Rate: 2020

53

Exhibit 4.10 — Crosstab of ESRP Company Match By Annual Savings Allocation for Account Type: ESRPs, 2020

54

Exhibit 4.11 — Crosstab of ESRP Company Match by Annual Household Saving Rate: by Annual Income, 2020

55

Key Finding #5: There are about 11M households in the "Aspire to Retire by 55" design target. Well positioned in some ways, these households need help to achieve this goal.

Exhibit 5.1 — Sizing of Households With Breadwinners Age <55 by Target Retirement Age: 2020

56

Exhibit 5.2 — Profiling Households With Breadwinner Age <55: All vs. Aspire to Retire by 55, 2020

57

Exhibit 5.3 — Student Loan Debt Statistics: Households With Breadwinners Age <55 by Anticipated Retirement Age, 2020

58

Exhibit 5.4 — Percent of Spending on Housing & Utilities: Households With Breadwinners Age <55 by Anticipated Retirement Age, 2020

59

Exhibit 5.5 — Select Wants & Attitudes Among Households With Breadwinner Age <55: All vs. Aspire to Retire by 55, 2020

60

Exhibit 5.6 — Investment Product Ownership - Incidence of Owning Each Product: Households With Breadwinner Age <55: All vs. Aspire to Retire by 55, 2020

61

Exhibit 5.7 — Investable Assets: Households With Breadwinner Age <55 by Anticipated Retirement Age: 2020

62

Exhibit 5.8 — Annual Household Saving Rate: Households With Breadwinner Age <55 by Anticipated Retirement Age: 2020

63

Exhibit 5.9 — Assets-to-Income Ratio: Households With Breadwinner Age <55 by Anticipated Retirement Age: 2020

64

Exhibit 5.10 — Peak Accumulator Behaviors Among Households With Breadwinner Age <55: All vs. Aspire to Retire by 55, 2020

65

Exhibit 5.11— Financial Responses To COVID-19 - "Have Taken This Action" Among Households With Breadwinner Age <55: All vs. Aspire to Retire by 55, 2020

66

Exhibit 5.12 – Reach into Aspire to Retire by 55: 2020

67

Exhibit 5.13 – Composition of Customer Base by Anticipated Retirement Age Segmentation: 2020

68

Appendix

Data Dictionary

69-73

Glossary, Sample Sizes

74-76
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Hearts & Wallets reports and research are for internal use only. Reports, wording of survey questions, structure of fields and data points are the property of Hearts & Wallets and are protected by copyright. Access to them is provided to you for internal strategic use only, and they cannot be used outside of your company without written consent from Hearts & Wallets LLC. Please contact Client Success to add more users for internal strategic access or to inquire about flexible options for licensing content for external use.

By clicking “I Agree”, you agree to our terms of use and that you have read our privacy policy.

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