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Advisors know that retirement is top of mind for scores of clients, including plenty that are in younger age groups with plenty of working years ahead of them. Advisors also know that clients’ perceptions about dollar amount needed to retire comfortably fluctuates depending on the individual and the various surveys gauging such things.
However, two constants have emerged in recent years. First, many clients and workers are worried about how their retirements are shaping up. Second, and very much related to the first point, folks consistently believe they need more than $1 million to “live the good life” when they exit the workforce.
Indeed, attitudes and outlooks regarding the state of retirement planning are somewhat gloomy at the moment, but there is some constructive news for advisors. Notably, clients remain engaged with employer-sponsored retirement vehicles, including 401(k) plans. That’s a sign they’re investing for the long-term and not being tossed out of the market simply because 2026 is proving to be a trying year on the macroeconomic front.
Getting down to the information advisors need to know, Schroders’ 2026 U.S. Retirement Survey indicates that workers currently participating in employer-sponsored retirement plans believe they’ll need at least $1.2 million to retire in solid fashion. Alone, that’s a call for increased advisor involvement.
Pre-Retirees Should Lean on Advisors
The Schroders survey highlights several other reasons why clients should keep their investment advisors informed about what they’re doing in their employer-sponsored and why more workers should consider hiring advisors.
Confirming that clients need advisors, the survey says 27% of respondents have trimmed contributions to workplace retirement plans with 70% of that group having done so over the past two years. Making matters worse is the fact that 27% of those polled said they’ve borrowed against retirement plans to address credit card debt, cost of living increases or unexpected medical expenses.
“Rising costs are forcing tough tradeoffs, and saving for retirement is often the first thing that gets deprioritized," said Deb Boyden, Head of US Defined Contribution at Schroders. “As an industry, we can't look at retirement savings in isolation. Credit card debt, rising costs, and emergency expenses are all part of the same equation. Plan sponsors who address these realities holistically, rather than focusing on retirement savings alone, are better positioned to move the needle on retirement readiness."
More Reasons Workers Should Lean on Advisors
There are plenty of examples of financial regret and retirement gaffes rank high on that list. Underscoring the need for workers to connect with advisors, the Schroders survey details some of the retirement savings errors at play. For example, nearly a quarter of respondents don’t know how the assets in their employer-sponsored plans are allocated.
Compounding that problem is a heavy allocation to cash. Respondents told Schroders their workplace retirement plans are 26% in cash, or nearly the same percentage they have in equities. That shouldn’t be the case and that’s a call for employees to tap into professional guidance.
“For investors who are not planning to retire in the next five years, holding one-quarter of your savings in cash comes with a significant opportunity cost,” said Boyden. “Concerns about market volatility and downturns are understandable given the current macro backdrop. To alleviate these concerns, innovative new investment solutions have been developed that can lessen the impact of market drawdowns and thereby provide participants some peace of mind.”
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