What Older Americans Want From Workplace Investing
Ideas for Improving Advice & Income Products
Order Report - What Older Americans Want From Workplace Investing: Ideas for Improving Advice & Income Products
Overview
This report is from the Hearts & Wallets research collection focusing on saving, investing and advice and leverages analytics and datasets from two proprietary databases - Investor QuantitativeTM and Explore QualitativeTM. It will be of particular interest to those who work on advice, retirement, retirement income, rollover and client experience for older consumers.
Older Americans are looking for advice on everything including work, retirement planning, investing, housing and tax optimization. But most are reliant on retail sources of advice vs. what is offered through the workplace. Find out why. Learn consumers biggest complaints, suggested fixes, and possible solutions for bridging the gap between wants and current workplace offerings.
The new 76 page report features 38 exhibits. See table of contents and sample pages below.
Key Findings
- The 43.5M households age 55-74 control $31T, or 55%, of all investable assets in the U.S. As navigating life beyond age 55 becomes more challenging without the pension safety net, older Americans are looking for advice on topics including work, retirement planning, investing, housing and tax optimization.
- Most people age 55+ are much less engaged with workplace resources than other sources of investing information and advice. Eligibility is not the main barrier: nearly half of investors ages 55 to 74 do not use “retirement planning resources provided through my employer” nor “would if they were offered.”
- Older affluent consumers reported 6 glaring complaints and disconnects as the reasons current workplace resources aren’t working for them.
- Older affluent consumers offered 6 suggestions for employers and financial services companies who are committed to serving them through workplace.
- Analysis of customer experience shows higher intent to recommend retail than workplace relationships. Lower results for workplace, plus facts that confirm consumer-reported gaps in advice on housing, work outlook and tax optimization, indicate that leaving money in plan for income and getting broader advice in retail may be the best approach.
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Sample Pages
Table of Contents
Executive Summary
Methodology
3-7
Key Findings and Implications, Favorite Statistics, Related Research
11-17
Key Finding #1: As navigating life beyond age 55 becomes more challenging without the pension safety net, older Americans are looking for advice on housing, work outlook and tax optimization.
1.1 U.S. Households (M) and Investable Assets ($T): by Age Groups, 2019
18
1.2 U.S. Households (M) and Investable Assets ($T): Ages 55 to 74 by Investable Asset Groups, 2019
19
1.3 Crosstab: Actual Replacement Rate by Concern “Making Ends Meet”: Post-Retirees, Ages 55 to 74, 2020
20
1.4 Crosstab: Actual Replacement Rate by Feelings about Financial Security: Post-Retirees, Ages 55 to 74, 2020
21
1.5 Actual Replacement Rate and Sources of Income: Post Retirees, Ages 55 to 74, by Investable Asset Groups, 2020
22
1.6 Percent of Income in Retirement from Pensions by Age of Stopping Full-Time Work: 2020
23
1.7 Anticipated Replacement Rate and Sources of Income: Late Career, Pre-Retiree, Fully Employed Seniors, Ages 55 to 74, by Investable Asset Groups, 2020
24
1.8 Selected Account Types Ownership Rates: Ages 55 to 64 and Ages 65 to 74, by Investable Asset Groups: 2019
25
1.9 Selected Real Estate Statistics: Ages 55 to 74, by Investable Asset Groups, 2015-2020
26
1.10 Explore Qualitative Exercise: Expectations for Financial Services from Workplace vs. Retail – Want vs. Get Ratio
27
Key Finding #2: Most people age 55+ are much less engaged with workplace resources than other sources of investing information and advice.
2.1 Sources of Investing Information and Advice – Reliance on “Employer-sponsored programs, including 401(k) or 403(b) provider and its representatives” (“Workplace”): by Breadwinner Age Groups, 2020
28
2.2 Attitude: “I use retirement planning resources provided through my employer or would if they were offered”: Ages 55 to 74, by Year
29
2.3 Sources of Investing Information and Advice – Reliance on “Employer-sponsored programs, including 401(k) or 403(b) provider and its representatives”: Among Eligible and Participating in Employer Plan, Ages 55 to 74, by Year
30
2.4 Sources of Investing Information and Advice – Reliance on “Employer-sponsored programs, including 401(k) or 403(b) provider and its representatives”: Segmented by Investable Asset Groups and Participation in Employer Plan, Ages 55 to 74, 2020
31
2.5 Compare Selected Sources of Investing Information and Advice – Reliance: Ages 55 to 74, All Asset Levels, 2020
32
2.6 Compare Selected Sources of Investing Information and Advice – Reliance: Ages 55 to 74, $500K-<$3M Investable Assets, 2020
33
2.7 Compare Selected Sources of Investing Information and Advice – Reliance: Ages 55 to 74, $100K-<500K Investable Assets, 2020
34
2.8 Compare Selected Sources of Investing Information and Advice – Reliance: Ages 55 to 74, <$100K Investable Assets: 2020
35
2.9 Crosstab - Agreement with Attitude “I understand where my income during retirement will come from” by Reliance on Workplace and Paid Investment Professional (Net): Ages 55 to 74, 2019
36
Key Finding #3: Older affluent consumers reported 6 glaring complaints and disconnects as the reasons current workplace resources aren’t working for them.
3.1 Explore Qualitative Exercise: Expectations for Financial Services from Workplace vs. Retail – Summary of Older Affluent Consumer Issues with Workplace Saving & Investing Advice
37
3.2 The fact that workplace saving and investing programs must be generic for all employees irks older affluent consumers…
38
3.3 The fact that workplace programs are generic gives them the feeling they can’t get what they want from workplace saving and investing solutions.
39
3.4 Perceptions that reps are inexperienced can give a bad impression. Older affluent consumers have decades of experience managing their finances, so even a rep with 5 to 10 years of experience can seem inexperienced to them.
40
3.5 Little or no proactive outreach gives older affluent consumers the impression that workplace saving and investing providers don’t care about them or their business.
41
3.6 Many participants feel saving and investing is not their employer’s area of expertise and they shouldn’t be trying to do it.
42
3.7 Some participants pointed out that, once you’ve retired, you’re no longer connected to your employer.
43
3.8 Some participants said, “I don’t want my employer involved in my finances.” what
44
Key Finding #4: Older affluent consumers suggest 6 fixes for employers and financial services companies who are committed to serving them through workplace.
4.1 Explore Qualitative Exercise: Expectations for Financial Services from Workplace vs. Retail – Summary of Consumer Suggested Ways to Improve Workplace Retirement Advice.
45
4.2 Older affluent participants know pensions are valuable. Those who have pension income feel “lucky.”
46
4.3 Participants said that good advice must be comprehensive, whether it’s provided by employers or by resources they find on their own.
47
4.4 Many of the participants were self-employed to some degree. Feelings of desire to understand human capital are energetic and urgent.
48
4.5 Older Americans who understand the dynamics of workplace retirement plans see employer legal liability that limits quality of advice and incentives as a problem.
49
4.6 Lack of clarity around provider incentives is widely acknowledged as a problem. This creates skepticism and makes consumers feel “leery.” and
50
4.7 Participants express frustration that pressures on workplace pricing limit choice. They are interested in paying more to get more, if fees were clearer.
51
Key Finding #5: Analysis of customer experience shows higher intent to recommend retail than workplace relationships. This, plus facts that confirm consumer-reported gaps in advice on housing, work outlook and tax optimization, indicates that leaving money in plan and getting broader advice in retail may be the best approach.
5.1 Crosstab - Percent of Actual Retirement Income from Pensions and Feelings of Financial Security: Post-Retirees, Ages 55 to 74, 2020
52
5.2 Attitude "I am comfortable leaving money in a retirement plan sponsored by a company where I no longer work”: Ages 55 to 74, by Year
53
5.3 Attitude "I am comfortable leaving money in a retirement plan sponsored by a company where I no longer work”: Ages 55 to 74, by Investable Asset Groups, by Year
54
5.4 Spending by Category: Ages 55 to 74, by Investable Asset Groups, 2020
55
5.5 Crosstab: Percent of Spending on Housing & Utilities and Feelings of Financial Security: Ages 55 to 74, 2020
56
5.6 Breadwinner Retirement Age – Actual and Anticipated: 2020
57
5.7 Work-Retirement Spectrum: Ages 55 to 64 and 65 to 74, by Investable Asset Groups, 2020
58
5.8 Retirement Income Plan Component – “Recommendations for minimizing your tax obligations during retirement”: Ages 55 to 74, by Investable Asset Groups, 2016
59
5.9 Intent to Recommend Primary & Secondary Stores: Ages 55 to 74, All Asset Levels, by Year
60
5.10 Selected Statistics on Workplace and Retail: Ages 55-74, $500K-<$3M, by Year
61
5.11 Selected Account Type Ownership Rates - Rollover IRAs, Current and Former Employer-Sponsored Retirement Plans: Ages 55 to 64 and Ages 65 to 74, by Investable Asset Groups, 2019
62
5.12 Selected Statistics on Workplace and Retail: Ages 55 to 74, $100K-<$500K Investable Assets, by Year
63
5.13 Selected Statistics on Workplace and Retail: Ages 55 to 74, <$100K Investable Assets, by Year
64
Appendix:
Data Dictionary
65-73
Glossary, Sample Sizes
74-76
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