Recent findings on behalf of Equitable exemplify the impact financial professionals have on K-12 403(b) employees.
Based on a survey of 1,000 K-12 educators, commissioned by Equitable and conducted by market research firm Zeldis Research Associates, the research found that K-12 educators who work with a financial advisor were likely to have a higher median retirement account balance of $48,000, compared to $39,000 of those who do not work with a professional.
Additionally, those who use a 403(b) financial professional had an average annual contribution of $9,000, relative to an annual contribution of $5,300 for employees who elected to not work with an advisor.
As a result, those who work with financial professionals credit the relationship for a renewed sense of financial confidence. The findings show that educators who work with a financial professional feel better prepared to deal with pressures, such as rising healthcare costs, a lack of self-preparation for retirement, inflation-fueled increases in the cost of living and reduced spending power. For example, 86% of educators who work with an advisor say they are making better investment choices, and 83% believe the relationship is helping them save more in the long run.
Over three-quarters of educators who work with a 403(b) advisor monitor their account performance (76% versus 57%) and they are almost twice as likely to monitor different investment types (40% versus 21%). This number rises for educators closing in on retirement, with 85% who say they monitor account performance and 42% who monitor investment types.
The research also shows that those working with advisors are more familiar with 403(b) plans, demonstrate greater awareness of their investment options, and better recognize the importance of their 403(b) accounts. Respondents surveyed also report greater confidence in the quality of their investment choices (75% versus 47%), in meeting retirement plans and retirement goals (78% versus 60%), and in their ability to leave assets to their heirs (82% versus 71%). In addition, 84% of educators who elect to use financial professionals are more likely to feel satisfied with their 403(b) plan, as opposed to 59% who do not.
The findings come as more plan sponsors have started adding 403(b) defined contribution (DC) plans for educators, as the number of pensions plans dwindles and more educators cannot rely on the retirement tool to fund their golden years, especially with rising inflation and market uncertainty.
Equitable’s research found that while inflation is still a concern for educators, those who work with financial professionals felt secured in their retirement plan and were less likely to worry over the market, healthcare costs, or with how prepared they are for retirement.
Additional findings from the study can be found here.
SEE ALSO:
- Why Investors are ‘Terrified’ About Retirement Savings
- Veteran Advisor Lists Top Solutions to Fight Inflation
- A Boon for the 403b: IRS Expands Tax-Favored Approval Process
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
