Using professional tools to plan for your retirement

Helping People Plan for Retirement

courtesy of Consumer Financial Protection Bureau


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In a recent study, we tested ways to help people better visualize the results of their retirement choices and plan ahead for significant decisions.

When people approach retirement age, they have to make many difficult, often irreversible choices. Just to give a few examples of these decisions, people must decide:

  • Whether and how to change their investments
  • Whether to take a lump sum, an annuity, or a rollover on their retirement accounts
  • How to handle assets like their home
  • When to start claiming Social Security
  • Whether to work with a financial advisor

These decisions are complicated for many reasons. Among them:

  • At retirement, consumers generally can't get help from their former employers, so they make decisions on their own.
  • It's hard to predict how long their retirement savings need to last.
  • Each retirement decision is complex, and consumers may feel overwhelmed and avoid making decisions.

Before and After: Two Moments Where You Can Provide Help

Developing ways to help consumers understand their retirement planning and management options can help consumers overcome some of these challenges. Here are two ways the study suggests helping workers plan for retirement.

Helping with decisions in advance of retirement

Simplify consumer communications and use effective visuals.

In the study, we tested whether email messages featuring relevant photographs and illustrations sent to consumers ages 55 and younger helped them to understand their choices and take action. Among other findings, the study suggested that consumers responded better to communications with visuals than to those without visuals.

Helping with decisions at the time of retirement

Offer simplified retirement planning resources for soon-to-be retirees.

In the study, we tested a streamlined form explaining various options for withdrawing money from retirement accounts. The study found that, compared to the standard form provided by their retirement plan providers, participants preferred the streamlined form and described it as being clearer about their options for withdrawing their money.

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Applying the Research Today

In brief, the research found that people were interested in straightforward, trustworthy ways to simplify their retirement planning and personal retirement account management. The findings can be used by employers, retirement plan administrators, financial educators, and more. All of these parties play a role in helping people choose among retirement services and products. At the CFPB, we encourage further research in this area.

And, if you're thinking about your own retirement, you can use this research yourself. Well before the time of retirement, consider the choices you'll face when you leave your job and when you'll begin spending your retirement savings.

For more on the research, along with examples of the strategies and communications that we tested in the study, read the report Consumer Insights on Managing Funds at Retirement.


Take the Next Step:

  • Use this tool to maximize your retirement by determining the best age to take your Social Security benefits. Don't leave thousands on the table by taking Social Security at the wrong time.
  • Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
  • Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.

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