Although many people retire without financial advice, leaving the workforce is still associated with higher levels of financial confidence and satisfaction.
In “Retirement Transitions in Four Countries,” a recent report by Valley Forge, Pa.-based Vanguard, one-in-three pre-retirees in the U.S., Canada, the UK and Australia were preparing to leave the workforce with no access to formal financial advice.
In the survey, two-thirds of the respondents reported having access to private sources of formal financial assistance through an advisor, a workplace retirement program or a financial institution, leaving one-third of individuals approaching retirement with only informal sources of help or no assistance at all.
U.S. respondents fared a little better, with 77 percent of retirees who left the workforce within the past 10 years able to access formal advice when approaching retirement, and 78 percent of pre-retirees planning to retire within the next 10 years utilizing formal assistance.
The most common reason for not accessing a financial advisor, cited by 54 percent of pre-retirees, was that traditional financial advice is viewed as prohibitively expensive. Many pre-retirees, 33 percent, claimed to have other sources of support that they used in lieu of an advisor, while another 29 percent reported that they did not find advisors trustworthy.
Yet, according to Vanguard, retirement nevertheless improved the financial satisfaction of respondents in all four countries.
The gap between levels of financial satisfaction between recent retirees and pre-retirees ranged from 12 to 26 percent, depending on the country. In the U.S., retirement boosted the financial confidence of respondents by 12 percent: while 63 percent of pre-retirees expressed confidence in their financial decisions, 75 percent of recent retirees said the same.