Financial Advice Doubles Retirement Savings
What happened
Retirement savers who use financial advice, education, or planning tools have account balances twice as large as those who do not, according to a T. Rowe Price report. The data suggests that professional guidance significantly impacts long-term savings outcomes.
Why it matters
- The T. Rowe Price analysis is based on recordkeeping data from over 2 million retirement plan participants. - Participants who engage with financial advice, education, or planning tools save at a rate 29% higher than those who do not. - Despite the positive impact on savings, only 13.8% of eligible participants currently use these professional guidance resources. - A separate 2024 survey by Pontera found that advised participants contribute an average of 15% of their income to their workplace plans, compared to 10% for their non-advised peers. - That same Pontera survey revealed 66% of participants working with a financial advisor contribute the maximum amount to their 401(k), versus 40% of those without an advisor. - The most common reasons people avoid seeking financial advice are concerns about the cost and a belief that they can manage their own finances effectively. - According to a Deloitte report, 66% of individuals who consult a professional have a formal retirement plan, in stark contrast to just 28% of those who do not. - A study published by the Financial Industry Regulatory Authority (FINRA) found that advised households have a significantly higher allocation to equities (47.9% vs. 36.1%) and are four times more likely to have a formal financial plan.
Key numbers
- Rowe Price analysis is based on recordkeeping data from over 2 million retirement plan participants.
- Participants who engage with financial advice, education, or planning tools save at a rate 29% higher than those who do not.
- Despite the positive impact on savings, only 13.8% of eligible participants currently use these professional guidance resources.
- A separate 2024 survey by Pontera found that advised participants contribute an average of 15% of their income to their workplace plans, compared to 10% for their non-advised peers.
What happens next
- Rowe Price analysis is based on recordkeeping data from over 2 million retirement plan participants.
- A separate 2024 survey by Pontera found that advised participants contribute an average of 15% of their income to their workplace plans, compared to 10% for their non-advised peers.
- According to a Deloitte report, 66% of individuals who consult a professional have a formal retirement plan, in stark contrast to just 28% of those who do not.
Quick answers
What happened in Financial Advice Doubles Retirement Savings?
Retirement savers who use financial advice, education, or planning tools have account balances twice as large as those who do not, according to a T. Rowe Price report. The data suggests that professional guidance significantly impacts long-term savings outcomes.
Why does Financial Advice Doubles Retirement Savings matter?
The T. Rowe Price analysis is based on recordkeeping data from over 2 million retirement plan participants. Participants who engage with financial advice, education, or planning tools save at a rate 29% higher than those who do not. Despite the positive impact on savings, only 13.8% of eligible participants currently use these professional guidance resources. A separate 2024 survey by Pontera found that advised participants contribute an average of 15% of their income to their workplace plans, compared to 10% for their non-advised peers. That same Pontera survey revealed 66% of participants working with a financial advisor contribute the maximum amount to their 401(k), versus 40% of those without an advisor. The most common reasons people avoid seeking financial advice are concerns about the cost and a belief that they can manage their own finances effectively. According to a Deloitte report, 66% of individuals who consult a professional have a formal retirement plan, in stark contrast to just 28% of those who do not. A study published by the Financial Industry Regulatory Authority (FINRA) found that advised households have a significantly higher allocation to equities (47.9% vs. 36.1%) and are four times more likely to have a formal financial plan.
