Published in Financial Services

Saving vs. Planning for Retirement

I’ve been digging through the data from the 2013 Maritz Research Retirement Study and I am unearthing a number of interesting tidbits. We surveyed 1,000 near and recent retirees with at least $100,000 of retirement savings.  First, we identified a psychological tipping point of $500,000.  People who have saved $500,000 or more are much more confident as they enter their retirement years

Another thing that stands out; there is a clear difference between saving for retirement and planning for retirement. Our research indicates that almost half (48%) of people within 5 years of retiring have listened to the investment community and began saving early—more than 25 years before they intend to retire. Not surprisingly, these early savers hold most (57%) of the dollars. Another large group (48%) of near-retirees began saving when they were between 10 and 25 years from retiring. Fortunately, only 4% began saving within ten years of retiring.


Planning, creating a formal plan outlining how a person is going to finance their retirement, is another story. Nearly 40% of near retirees are waiting until within ten years to develop their plans and they hold 41% of the retirement dollars. Only 15% plan early.  Most people (47%) plan between 11 and 25 years before retiring.


What do these findings mean to investment firms and financial advisors? While investment professionals should continue to develop relationships with clients as early as possible, considerable business opportunity exists among those approaching retirement.

There are several other findings from the research that will answer related questions such as “When do retirees select their financial advisors?” and “When and how do retirees redeploy the funds in their employer-sponsored retirement plans to other vehicles? We will address these questions here on Sound Check in the near future.