SPOTLIGHT
Are your clients prepared for retirement?
Use the results of the 2023 Fidelity Retirement Savings Assessment to find ways to help clients accelerate progress toward their retirement goals.
America’s median RPM
The overall median Retirement Preparedness Measure (RPM) for the typical American household is 78, which falls into the "Fair" zone, meaning the typical retirement saver is on target to have 78% of the income Fidelity estimates they will need to cover retirement costs.
For illustrative purposes only.* Fidelity’s Retirement Preparedness Measure (RPM) is calculated through the proprietary asset/liability modeling engine of Strategic Advisors LLC, which has been providing asset allocation, retirement, and tax-sensitive investment management services to Fidelity’s individual and institutional clients for nearly two decades. Median scores: 34% of households are in the red zone, 18% in the yellow zone, 16% in the green zone, and 32% in the dark green zone.
Millennials (born 1982–1992)
Millennials have the benefit of time on their side, so staying invested and making steady contributions—even through market volatility and recession fears—can help your retirement savings grow long term and recover from any downturns.
For illustrative purposes only.
* Fidelity’s Retirement Preparedness Measure (RPM) is calculated through the proprietary asset/liability modeling engine of Strategic Advisors LLC, which has been providing asset allocation, retirement, and tax-sensitive investment management services to Fidelity’s individual and institutional clients for nearly two decades. Median scores: 34% of households are in the red zone, 18% in the yellow zone, 16% in the green zone, and 32% in the dark green zone.
Gen X (born 1966–1981)
Gen X-ers are in their prime earning years and may still have a long time before retirement to save and invest, so there's plenty of time for your money to potentially grow. Individuals 50 and above can even leverage catchup contributions to boost savings.
For illustrative purposes only.
* Fidelity’s Retirement Preparedness Measure (RPM) is calculated through the proprietary asset/liability modeling engine of Strategic Advisors LLC, which has been providing asset allocation, retirement, and tax-sensitive investment management services to Fidelity’s individual and institutional clients for nearly two decades. Median scores: 34% of households are in the red zone, 18% in the yellow zone, 16% in the green zone, and 32% in the dark green zone.
Baby Boomers (born 1946–1964)
As Boomers get closer to retirement, being clear on your goals and having a plan in place can make a big difference in ensuring your savings last.
For illustrative purposes only.
* Fidelity’s Retirement Preparedness Measure (RPM) is calculated through the proprietary asset/liability modeling engine of Strategic Advisors LLC, which has been providing asset allocation, retirement, and tax-sensitive investment management services to Fidelity’s individual and institutional clients for nearly two decades. Median scores: 34% of households are in the red zone, 18% in the yellow zone, 16% in the green zone, and 32% in the dark green zone.
Consider six ways to accelerate your clients’ retirement preparedness
Pre-retirement
Many clients may not be planning adequately for retirement because they are unsure where to start or are concerned that their personal retirement income goal may be unattainable. However, the findings clearly demonstrate actions that can be taken to gain better control over their financial future and boost their retirement preparedness. These include:
Raise savings now
Even small increases in savings can make a big difference, especially when placed in retirement savings vehicles.
Revisit asset mix
The goal is a portfolio with exposure to various asset classes that can provide the opportunity for growth and outpace inflation, while also providing a certain level of downside protection.
Retire later
The longer you can wait, the more time to build savings. Waiting until you're at least entitled to full Social Security Retirement benefits (between 65 and 67) may increase your monthly benefit.
Post-retirement
While the retirement preparedness measure is an estimate of savings adequacy, savers may need to take additional steps to provide additional retirement income or cover essential expenses. Some examples of additional steps savers can take include:
Return to work part-time
This can boost retirement income—and help keep investors active and involved.
Realize home equity
If investors own a home, they should estimate the impact of downsizing and investing the proceeds. What’s more, property maintenance costs will most likely decrease, freeing up assets for other retirement expense needs.
Reallocate part of savings into an annuity
Combining a lifetime fixed income annuity with an investment portfolio can reduce the risk that retirees will outlive their assets.
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