Investors struggle with retirement know-howNews added by Benefits Pro on August 20, 2014

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By Marlene Y. Satter

Investors — those with $25,000 or more in investable assets — are better prepared for retirement than the general population, according to a new report from the Investment Retirement Institute (IRI), but they still have gaps in their knowledge and understanding of different financial products.

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Most investors, however — 62 percent of them — work with a financial advisor to answer all those nagging questions for which they have no answers. And the answers must be helping, because investors really are better positioned financially for retirement, according to the study — with 72 percent having socked away at least $250,000 and 45 percent having managed to save double that amount. Sixteen percent have even managed to squirrel away a cool million. The survey respondents are “a wealthy group,” more than half of whom make more than $100,000 annually.

Still, it’s not surprising, given those figures, that when investors do talk with financial planners, retirement is the most talked-about subject. And while investors do have some impressive facts on hand, with 90 percent saying tax deferral is an important characteristic of an investment and two thirds saying rebalancing their portfolios every year, there are still those gaps. While they say they’re knowledgeable about stocks and mutual funds, only 46 percent of them claim to be “highly knowledgeable” about them.

As a result, for 28 percent of respondents, the recommendation of a financial advisor plays the largest part in deciding which investment to choose. Past performance (26 percent) and rate of return (25 percent) were the next most popular answers.

Of course, as financially prepared as they are for retirement, 10 percent still do not know when they will retire, and 18 percent plan to work until age 70 or later.

“IRI research has consistently shown that planning for retirement with the help of a financial advisor leads to better outcomes and more confidence,” says Cathy Weatherford, IRI president and CEO, in a statement. “With more than six in 10 investors working with a financial professional, it’s not surprising to see so many investors showing high levels of confidence regarding their retirement outlook. In fact, 59 percent of investors are very or extremely confident in having enough savings to live comfortably in retirement. Only a third of all baby boomers have that same level of confidence.”

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