Most investors in retirement income plans say they want the ability to access additional withdrawals from their retirement funds, if they need the money.
That’s according to a Cerulli Associates/Phoenix Marketing International survey, which found that 58 percent of respondents said the ability to draw additional funds if needed was an important feature in retirement income plans.
While respondents also racked up a substantial list of other features they’d like to have, the ability to access additional funds takes on additional importance, Cerulli said, particularly in goals-based planning, which look at financial plans in a more flexible manner.
In research, Cerulli said that the traditional 4 percent rule, which assumes that retirees can draw up to 4 percent annually from an initial portfolio, adjusted for inflation, and not have to worry too much about running out of money, might no longer be valid.
“Given current market conditions, and the longevity risk of retirees,” the study said, “withdrawal rates lack predictability. In addition, life-changing events can alter the amount of money needed each year during retirement.”
Cerulli suggested that advisors and recordkeepers “should provide projections for investors that simulate personalized dynamic withdrawal rates.”
Some of the other features that were most popular were the possibility for assets to continue to grow even after the beginning of withdrawals (43 percent); the ability to change investments in the future (40 percent); being able to receive automatic monthly payments (35 percent); and having an advisor oversee retirement savings accounts and manage the income plan (24 percent).
Some investors would like to have all their accounts at a single financial institution (17 percent), with nearly as many (15 percent) saying they’d like their retirement savings accounts integrated with their banking/checking accounts. But only 4 percent were in favor of having a single financial product meet all their retirement needs.
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