Financial Wellness “To” and “Through” Retirement

Many employer survey results indicate that 92 percent are expanding financial wellness programs; one-third of the workforce is 50 or older; and 73 percent are planning for increased healthcare costs due to an aging workforce.¹

Holistic planning is critical. In addition to any DC assets, the following factors can also be considered: outside assets, income forecasting, and leveraging retirement income/savings to increase Social Security benefits. Employing  a naïve Social Security strategy versus a well-planned one could result in a lifetime benefit difference of tens of thousands of dollars. For example, many individuals have it ingrained in them to delay utilizing DC assets as long as possible. However, using some of these assets in order to delay Social Security distributions and, in the process, allowing for the Social Security benefit to increase over time, can result in a greater benefit in the aggregate. Retirees are not using these holistic strategies for several reasons, including human behavior (again, people don’t want to touch their defined contribution plan assets); many solutions are just tools / education (they don’t drive action); lack of access to financial help due to asset minimums; and high fees (retail advisor fees often range from 0.85 percent to 2 percent or more).

¹Fidelity. Retiree health care costs continue to surge. 09/06/2017.
ACR#269982 12/17