Recently, The American College of Financial Services surveyed Americans to find out what they know about retirement income.
This was one of the most comprehensive surveys of retirement income literacy ever conducted. Most previous studies had focused on the accumulation period prior to retirement. This study was also unique in that it focused on those ages 60-75 and measured their understanding of critical issues in retirement. “Everyone is aware that once they move into retirement, they need to figure out what are they going to do with those assets and how are they going to address those new risks they face in retirement,” says Dave Littell, the RICP Retirement Income Program Director at the American College. “There’s a general recognition that it’s complicated too. It’s something that requires advice. It’s very hard to do this on your own. Just think of what we’re talking about: people making sure they don’t run out of money at the end of their life when they can’t do anything about it. So the stakes are very high.”
Every day, 10,000 baby boomers retire — and while many financial planners have done a decent job helping clients accumulate wealth, the more complicated issue is how to spend it — meaning, how to turn ones accumulated assets into retirement income.
The survey addressed 12 relevant topic areas: retirement planning, ability to maintain a chosen lifestyle, income generation, Social Security, annuity product knowledge, average life expectancy, death of a spouse, taxes, inflation, housing issues, medical insurance, and long-term care concepts.
Only 26% of retirees and pre-retirees passed the test. And while over 85% scored a D or lower, 61% believed their knowledge of retirement income was above-average. You can take the quiz here: https://hubs.ly/H0fy5c30
Retirement Income Certified Professional® Financial advisors who earn the Retirement Income Certified Professional® (RICP®) designation have the in-depth knowledge to help investors plan a secure, sustainable retirement. Advisors with the RICP® mastered the retirement income principles outlined in the literacy quiz and beyond.
Does your advisor have a specialization in retirement income? You can check here: http://www.designationcheck.com/
Wayne Arnold, ChFC®, RICP®
Managing Partner
Financial Planning Center, LLP