A formal, written retirement plan vastly enhances people’s confidence in being able to retire well, according to a study released Tuesday by LIMRA, a research and consulting organization for financial services and insurance companies.
The study by LIMRA’s Secure Retirement Institute finds that half of people ages 55 to 75 who have a formal retirement plan feel very prepared for retirement, compared to only 17 percent of those who do not have a plan. The survey included 2,166 people with $100,000 or more in investable assets.
Only 16 percent of those surveyed have a formal retirement plan, says Matthew Drinkwater, assistant vice president, LIMRA Secure Retirement Institute. “Our research demonstrates that taking the time to create a formal retirement plan—which involves a comprehensive discussion about goals, asset management and risk mitigation—often leads to better outcomes in retirement.”
The study, "The Benefits of Retirement Planning," also shows 80 percent of those with a formal plan have estimated how many years their assets will last into retirement, nearly double of those who don’t have a formal plan.
“Even the wealthier consumers say they found value in a formal plan—if only to review and vet their own ideas,” he adds.