Only 13% of Retirement Plan Participants Seek Out Advice
TIAA Institute analyzed the use of advice in 23 plans for which it was the sole recordkeeper between 2009 and 2014 and found that a mere 13% of participants seek out advice.
However, interest in advice increases with age, account balance and annual contribution level, according to TIAA’s report, “New Evidence on the Demand for Advice Within Retirement Plans.”
For example, among those in the lowest five deciles with regards to their account balance, only 8% seek out advice. In deciles 6 to 9, this increases to 16%, and in the top decile, it is 30%.
“Because participants with higher salaries are likely to receive lower income replacement rates from Social Security,” TIAA says, “their retirement account balances will need to cover a larger fraction of their retirement expenses. Consequently, we predict that demand for advice will increase with the level of the annual retirement contribution, which should be strongly correlated with the level of the participant’s salary. We [also] predict that demand for advice on retirement income levels will increase as participants approach, or pass, their Social Security normal retirement age.”
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