Tuesday, February 09, 2016
Writing down information not only helps you retain it, but it also helps to set the wheels in motion—and when it comes to retirement, action can make all the difference. According to recently released research from the LIMRA Secure Retirement Institute, pre-retirees with formal, written retirement plans feel more confident about their future than those without, and are twice as likely to feel prepared for retirement."While three-quarters of pre-retirees and retirees have some kind of financial retirement plan, our study found only 16 percent have a formal written retirement plan,” says Matthew Drinkwater, PhD., assistant vice president, LIMRA Secure Retirement Institute. “Our research demonstrated that taking the time to create a formal written retirement plan—which involves a comprehensive discussion about goals, asset management and risk mitigation—often leads to better outcomes in retirement.”
The research, documented in a study called “The Benefits of Retirement Planning,” reveals a stark contrast between those who write out their retirement goals and those who do not, with significant implications for retirement outcomes. For example:
• Eighty percent of those with a formal written plan have estimated how many years their assets will last into retirement, nearly double of those who don’t have a formal written plan (42 percent).
• More than three-quarters of pre-retirees and retirees who have a formal written plan (78 percent) have developed a specific plan for generating income from savings; only 38 percent of those without a formal written plan have done the same.
• Pre-retirees with formal written plans are twice as likely to convert a portion of their assets into guaranteed income (22 percent vs. 11 percent). Retirees with formal written plans are three times as likely to convert a portion of their assets into guaranteed income (25 percent vs. 8 percent).
“Strikingly, most of pre-retirees and retirees we interviewed said they would not have been as financially successful without a formal written retirement plan, acknowledging their own lack of awareness and skill,” says Drinkwater. “Even the wealthier consumers said they found value in a formal plan—if only to review and vet their own ideas.”
Source: LIMRA
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