Employees want more individualized, comprehensive advice in planning for retirement, but many employers are not providing those services within employee benefit education programs, according to a study by Merrill Lynch, Plainsboro, N.J.
Of employees who are offered retirement planning services by their employers, 87% said if their companies offered comprehensive financial planning services, it would be effective in helping them plan for retirement. Individual counseling would be an effective tool in retirement planning for 88% of respondents.
Eighty-four percent of pre-retirees and 85% of baby boomers who sought professional financial advice, either privately or through their companies, said they felt prepared for retirement, compared with 46% of pre-retirees and 57% of baby boomers who did not seek professional financial planning. The study classified pre-retirees as those between the ages of 45 and 64 and baby boomers as those between the ages of 25 and 44.
More than twice as many pre-retirees who worked with a financial planner diversified both defined contribution plan and personal investments, as those who did not receive any outside advice.
Despite the clear desire by employees for comprehensive financial planning services and individual counseling, only 42% of the benefits managers interviewed for the survey said their companies offer individual counseling. Only 29% of companies offer investment education seminars and only 6% comprehensive financial planning services.
Merrill Lynch published the results of its fifth annual retirement survey in a report, "How Employers Influence Retirement Savings in America." Results are based on interviews with 400 pre-retirees and 400 baby boomers. Also interviewed were 306 benefits managers at companies with between 25 and 2,000 employees.