Working with a financial advisor leads to more
confidence and better outcomes in retirement
BALTIMORE, March 19,
2024 /PRNewswire/ -- T. Rowe
Price, a global investment management firm and a leader in
retirement, today published a new report that reveals the
importance of financial planning for retirement. The report shows a
correlation between individuals with a formal financial plan and
having two to four times more wealth when entering retirement
compared to those without one. Individuals with a financial plan
are also more likely to contribute more toward their retirement and
work with a financial advisor.
The report also found that the demand for financial planning
services is strongest among individuals who are within one to five
years of their retirement date, and 38 percent of respondents over
the age of 50 indicate that not having enough money was their most
significant obstacle to starting retirement planning.
"The retirement industry has historically focused on helping
savers climb the hill of contributing toward their future
retirement," said Bill Meyer, head
of Retiree, Inc. at T. Rowe Price.
"However, given the number of complex financial decisions facing
retirees on the other side of that hill, the need for better
planning and guidance through retirement is clear. Ultimately,
having a formal financial plan tailored to one's specific needs can
help not only with wealth accumulation, but also with making
retirement savings last longer."
Additional key insights from the report include:
- Survey respondents with a formal plan reported 60 percent
higher confidence about their financial outlook
- Seven in ten pre-retirees who responded to the survey were in
the process of forming a retirement plan or thinking about it
- Sixty percent of survey respondents indicated that their
employers are the primary source for financial education and
guidance
- Forty percent of respondents stated that they are willing to
engage a financial advisor and are interested in using digital
planning tools to help with income, savings, and spending
Meyer continued, "Advances in technology have given investors
greater access to effective and convenient solutions for
personalized financial planning, and we expect the demand to
increase, especially for tools involving retirement income."
Plan sponsors can meet this need by providing digital services
and financial wellness programs that address the impending needs of
pre-retirees and families in retirement. These types of solutions
are not only valued by participants but could also be a catalyst
for driving better retirement outcomes.
The insights from the report are based on T. Rowe Price's annual Retirement Savings and
Spending study, which surveys a national representative group of
401(k) participants. The report with more details on the
importance of financial planning for retirement can be found here.
Retirement Income was a key theme in T. Rowe Price's 2024 U.S. Retirement Market
Outlook.
ABOUT T. ROWE
PRICE
Founded in 1937, T. Rowe
Price (NASDAQ – GS: TROW) helps individuals and institutions
around the world achieve their long-term investment goals. As a
large global asset management company known for investment
excellence, retirement leadership, and independent proprietary
research, the firm is built on a culture of integrity that puts
client interests first. Clients rely on the award-winning firm for
its retirement expertise and active management of equity, fixed
income, alternatives, and multi-asset investment
capabilities. T. Rowe Price has
$1.51 trillion in assets under
management as of February 29, 2024,
and serves millions of clients globally. News and other updates can
be found
on Facebook, Instagram, LinkedIn, X, YouTube,
and troweprice.com/newsroom.
IMPORTANT INFORMATION
The Retirement Savings and Spending Study is a nationally
representative online survey of 401(k) plan participants and
retirees. The survey has been fielded annually since 2014. The 2023
survey was conducted between July 24,
2023, and August 13, 2023. It included 3,041 401(k)
participants, full-time or part-time workers who never retired,
currently age 18 or older, and are either contributing to a 401(k)
plan or eligible to contribute with a balance of $1,000 or more. The survey also included 1,176
retirees who have retired with a Rollover IRA or left a 401(k) plan
balance.
This material is provided for general and educational purposes
only and is not intended to provide legal, tax, or investment
advice. This material does not provide recommendations concerning
investments, investment strategies, or account types; it is not
individualized to the needs of any specific investor and not
intended to suggest any particular investment action is appropriate
for you, nor is it intended to serve as a primary basis for
investment decision‑making.
Any tax‑related discussion contained in this material, including
any attachments/links, is not intended or written to be used, and
cannot be used, for the purpose of (i) avoiding any tax penalties
or (ii) promoting, marketing, or recommending to any other party
any transaction or matter addressed herein. Please consult your
independent legal counsel and/or tax professional regarding any
legal or tax issues raised in this material.
The views contained herein are as of the date written and are
subject to change without notice; these views may differ from those
of other T. Rowe Price
associates.
This information is not intended to reflect a current or past
recommendation concerning investments, investment strategies, or
account types, advice of any kind, or a solicitation of an offer to
buy or sell any securities or investment services. The opinions and
commentary provided do not take into account the investment
objectives or financial situation of any particular investor or
class of investor. Please consider your own circumstances before
making an investment decision.
Information contained herein is based upon sources we consider
to be reliable; we do not, however, guarantee its accuracy.
Past performance is not a reliable indicator of future
performance. All investments are subject to market risk,
including the possible loss of principal.
T. Rowe Price Investment Services, Inc., distributor, and
T. Rowe Price Associates, Inc., investment adviser. Retiree,
Inc. is a wholly owned subsidiary of T. Rowe Price. T. Rowe Price Investment Services,
Inc. and T. Rowe Price Associates, Inc. are affiliated
companies.
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SOURCE T. Rowe Price Associates, Inc.