While withdrawal strategies are key to any retirement plan, developing the optimal approach can be difficult for participants. They must consider complex factors beyond just their savings, such as healthcare costs, lifestyle choices, market conditions and taxes. Ideally, recordkeepers should serve as the first source of guidance to offer support and resources for both near-retirees and those in retirement. Firms help participants the most when they offer digital help with income planning, and ensure these resources are relevant to both near-retirees and those in retirement.

Our retirement research shows that firms often provide comprehensive income planning education but lack the interactive tools or calculators that help participants build a tailored plan. Meanwhile, our survey data shows that users want tools that address retirement income and withdrawal strategies. There’s a gap between user expectations and current firm offerings—an opportunity for a savvy firm. Currently, even firms that do offer an income projection analysis tool could better serve users approaching or in retirement, as only a few recordkeepers incorporate decumulation analysis.

Decumulation analysis can show retirees how to best withdraw the savings they’ve worked hard to accumulate over their lifetimes. Our retirement research team notes that only 38% of the firms we track (as part of our Retirement Plan Monitor (RPM) research) list the account value each year in retirement. Just three firms project the retiree’s annual expenses as a part of their income projection tool. Income planning calculators can supplement more comprehensive income projection tools, yet few firms offer these either; in fact, five firms (31%) offer no income planning analysis at all. Our survey shows that users want more on this topic.

Firms offer retirement income planning resources across a wide variety of formats

When it comes to retirement education resources, our survey data shows a gap between what firms offer and what participants want. Articles are by far the most common resource from the firms we track, but only 35% of survey respondents considered articles “very important” or “extremely important.” Half of firms offer webinars or presentations—which are presumably more expensive and harder to produce than articles—but respondents don’t care that much. Only a quarter assigned webinars and presentations top-two box importance.

This graph from CI shows what firms offer and what retirees want in terms of educational resources
Inverse Correlation Exists between Prevalence of Content Formats and Their Assigned Importance Ratings

Other content mediums are less common overall, with only around a third of firms offering courses, videos or worksheets. Just 19% provide podcasts, although this level of representation better aligns with respondents’ answers. Podcasts were the least important medium to survey respondents.

When it comes to the range of content mediums, firms are similarly diverse. A quarter of firms offer at least four different mediums, while just 31% offer one form of content or none at all. Our survey suggests a scattershot approach might be the most effective. With no clear consensus on the best content format in our survey—FAQs were the only resource to top 50% in top-two box importance—firms might as well offer a variety and let users decide which format is most appealing to them.

Fidelity stands out for integrating decumulation analysis into projection tools

While firms provide an assortment of general education for participants, most firms could do better when it comes to offering personalized planning resources. Income projection tools allow users to account for variables beyond just their contribution rate and asset allocation when planning their retirement income. Fidelity is a clear leader in this regard, offering a Retirement Analysis tool that generates a highly detailed appraisal of participants’ income and overall savings balance through the end of retirement.

This screenshot shows income projections from Fidelity's retirement analysis tool
Fidelity Secure Site Retirement Analysis Tool Output

Fidelity’s analysis tool offers a more comprehensive planning resource, going beyond a general income projection and providing a personalized output that breaks down the balance year-by-year. This allows users to see the potential adjustments they need to make to their current plan. The tool provides multiple visualizations that help users digest complex data and customize outputs, including the option to add or remove variables, adjust hypothetical market conditions, and view the results in terms of present or future dollars.

The tool also summarizes results in a comprehensible table, which identifies potential shortfalls for each year of retirement and allows users to see how adjusting certain factors—such as Social Security benefits and desired retirement lifestyle—could help them close these income gaps. Notably, Fidelity is one of two firms that provides built in-worksheets that supplement the tool by helping users estimate their future expenses and income.

This screenshot shows the hypothetical assets chart available to Fidelity users
Fidelity Retirement Analysis – Hypothetical Assets Chart

Overall, an ideal retirement firm offers comprehensive educational resources across several format types. By offering educational materials, firms support novice investors beginning their retirement savings journey. At the same time, firms ensure experienced investors have the information they need as they near retirement, providing resources that cover topics such as withdrawal and budgeting strategies.

However, many participants still want personalized and engaging ways to plan for their retirement. Income projection tools can generate a specific retirement balance based on participants’ current situations, allowing them to better understand any changes they need to make—but only a handful of firms offer tools that integrate detailed decumulation analysis. Additionally, almost half of firms fall short of the mark by failing to offer standalone calculators covering income planning topics. As the retirement industry grows, more firms may look to outside providers to bolster their proprietary offerings with a more robust selection of resources that enhance the educational experience.

Subscribers can read the full comparative analysis report on retirement income planning resources on our client portal. Learn more here about CI’s research services for plan sponsors, plan participants and workplace finance programs. Or contact us to learn what our research can do for your organization.

Sebastian Fritsch