The Use and Impact of Advice among Near-Retirees

Paul J. Yakoboski
Principal Research Fellow
TIAA-CREF Institute

February 2010 |

Individuals face an array of planning issues as they grow older and approach retirement. Sixty percent of near-retirees in higher education have consulted with a financial advisor or other financial professional within the past two years regarding their retirement and preparing for it. Given that only 10% of near-retirees feel that they are confident in their ability to research and make financial decisions related to retirement on their own, it’s reasonable to expect many of those who have not yet consulted an advisor to do so before retiring.

While the most common issue covered in consultations with an advisor is the investment allocation of savings, the two issues on which near-retirees consider it most important to receive advice as they near retirement are strategies for drawing income from savings in retirement and paying for health care in retirement. In addition, evidence indicates that advice specifically on these two subjects is associated with greater focus on the issues and higher perceived readiness.

Receiving advice does not automatically translate into implementing the advice. Among higher education near-retirees who have consulted with a financial advisor within the past two years, 17% report always implementing the recommendations of their advisor(s), while 31% only implement the advice some of the time if ever. A likely reason for non-implementation among some is trust; advice received is viewed as always being independent and objective by only 25% of those who typically do not implement an advisor’s recommendations.

© 2014 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017