Most financial advisors say the majority of their clients are saving enough to fund their retirement, but that still leaves a substantial minority of pre-retirees who are waiting to save more in the future and they will probably fall short.
Those are some of the conclusions found in the FA 2014 Retirement Survey of nearly 1,800 advisors. This is the third in a series of stories about the results.
“I’ve been in this business for 25 years and you always get clients who say they will save more for retirement next week, but that never happens,” says Courtney Livingston, an advisor with Thrivent Financial in Watertown, S.D., who was a survey respondent.
Livingston, who serves people with a wide range of financial assets, says he tries to tell clients to save just a little more each week so they will have enough when they reach retirement age.
“I’m concerned with the middle-class people because it is costing so much to live today, even when they are pretty frugal, that it is hard to save,” he says. He deals with many modest wage earners and says less than 40 percent of his clients are on track for saving for retirement.
He is among the 10.5 percent of advisors who say less than 40 percent of their clients age 50 to 65 are on track to meet their retirement goals. The largest group of advisors, 24.4 percent, say 70 percent to 80 percent of their clients are going to meet their goals with their current savings rate.
Approximately the same number of advisors (17 percent each) say 45 percent to 60 percent or 60 percent to 70 percent of their clients are saving in a way that will let them meet their goals.
Approximately 11 percent of advisors have 90 percent or more of their clients saving in line with their retirement goals.
For those clients who are not saving enough, education is the key, according to Marilyn Suey, a financial planner with Yerba Buena Financial Partners LLC in San Ramon, Calif.
“A lot of information is available in the general press and we try to make people listen to us. We want to make sure people understand, particularly those under 40 years of age, that they are going to have a phenomenal longevity,” she says. “Even if they work until they are 70, they will probably have to support themselves until they are 100.”