Americans Delay Seeking Advice Because They Don’t Have Enough Funds

Survey Finds 45 Percent Think They Need At Least $50,000 in Savings to Warrant Financial Advice

NEW YORK--(BUSINESS WIRE)-- Nearly half of Americans believe they need a sizable nest egg to justify working with a financial advisor, according to TIAA-CREF’s fourth annual Advice Matters survey. In fact, 45 percent of respondents think they need at least $50,000 in savings to merit that meeting. Of those who have never received professional financial advice, 63 percent listed “I don’t have enough money to invest” as a reason.

However, the survey also found that respondents who have met with an advisor are significantly more confident in their retirement savings plan than those who have not (78 percent versus 43 percent) – a strong motivation for Americans to seek financial advice regardless of how much they have saved.

“Everyone can benefit from financial advice because we all have something we’re working toward — paying off student loans, purchasing a new home, or making sure our loved ones are taken care of when we’re gone,” said Kathie Andrade, EVP and President, Individual Advisory Services at TIAA-CREF. “No matter where you are in your savings journey, you don’t have to go it alone. The sooner you engage an advisor, the more likely you are to meet your goals. And an advisor can help you stay on track and adjust when needed.”

In fact, approximately one-third of respondents who have received professional financial advice report they subsequently changed their asset allocation in their retirement plan (37 percent), increased the amount set aside in savings (36 percent), decreased spending (29 percent), monitored their savings more frequently (32 percent) and established a plan for paying off loans or managing debt (28 percent).

Working with a financial advisor may also help Americans ensure they have an accurate target for retirement income. Survey respondents who have discussed retirement with an advisor are much more likely to “run the numbers” and calculate how much income they will need in retirement – 79 percent versus only 32 percent who have not met with an advisor. Nearly all of those who have met with an advisor have talked about a plan for turning their savings into monthly income upon retirement, and 58 percent have put that plan into action.

Most experts recommend that individuals target 70 percent to 100 percent of their pre-retirement income to maintain their standard of living in retirement, but 55 percent of respondents think they will need 75 percent or less of their current income in retirement. This could put these individuals at risk to outlive their savings.

“Plan for the future you want,” said Andrade. “Working with a financial advisor can help you do that, because you will walk away with a realistic picture of your life in retirement—and the income you will need each month to maintain that lifestyle.”

Gender, Generational Gaps Persist

Though 49 percent of all respondents report that they have received financial advice, significantly more men (56 percent) than women (43 percent) have taken this important step. Women who have not received professional financial advice also are more likely (41 percent) to say the primary reason that they haven’t worked with a financial advisor is that they don’t have enough money to invest, while only 30 percent of men report the same. Just 31 percent of women say they have calculated the amount of money they will need to live comfortably in retirement, while 50 percent of men have done so.

Gen Y respondents are the least likely to have received professional financial advice (42 percent) among all generations, but they also are the most interested in receiving advice in the future (83 percent). And considering 61 percent of Gen Y members think they will need 75 percent or less of their current income in retirement, financial advice may help them adjust their expectations and ensure their savings are adequate to support a retirement that could last 20 years or more.

“Getting financial advice often leads to positive actions – increasing the amount of retirement savings, establishing an emergency fund or developing a plan for paying off debt,” Andrade said. “It’s never too early – or too late, for that matter – to consult with an advisor and put a financial plan in place.”

Debunking Myths About Financial Advice

Though many believe that financial advice is only necessary as retirement approaches, the survey reveals that Americans are debunking that myth. Respondents indicated that other life events may prompt them to pursue advice, including:

Inheritance (52 percent)
Preparing to purchase or sell a home (40 percent)
Decrease in household income (32 percent)
Loss of a loved one (31 percent)
Divorce (30 percent)
Promotion or increase in compensation (30 percent)

People often think that they will get financial advice by sitting down in the same room with an advisor – and, in fact, 88 percent of respondents report they find these face-to-face meetings to be valuable. But Americans recognize that advice can be delivered effectively through other channels as well. Seventy-nine percent say tools and calculators are valuable, along with online articles (72 percent), brochures and other written materials (70 percent), videos (68 percent) and online meetings using a chat function (58 percent). Eighty-one percent say it would be helpful to get online financial advice specifically designed for their age group to ensure they have guaranteed income in retirement.

TIAA-CREF helps individuals plan for retirement and other milestones by using a variety of resources and interactive tools to offer financial advice, regardless of a participant’s income or savings level. Individuals can access advice online, by phone or face-to-face with one of nearly 900 advisors located across the country. TIAA-CREF also offers helpful information in its online Advice and Guidance Center, while educational programs such as Woman2Woman help participants at different ages and income levels with their most pressing financial issues.

For more information on the survey, please read the 2015 TIAA-CREF Advice Matters Executive Summary. For more information on TIAA-CREF's Advice and Guidance offerings, visit our Advice and Guidance Center.

Survey Methodology

The survey was conducted by KRC Research from Aug. 3 to 10, 2015, via an online survey of 2,000 U.S. adults age 18 and older. The survey was not conducted among TIAA-CREF participants, and the survey questions and responses did not reference or concern any TIAA-CREF product, service or client experience.

About TIAA-CREF

TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $834 billion in assets under management (as of 9/30/2015) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

Disclosures

TIAA-CREF provides advice to eligible participants depending on their institution’s plan rules.

The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results.

TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each of the foregoing is solely responsible for its own financial condition and contractual obligations.

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