In the News


Investors Focused on What They Can Spend Each Year in Retirement, According to Dimensional’s 2017 Global Investor Feedback Survey

 

  • When planning for or in retirement, investors say how much they will be able to spend each year is the most valued information vs. the size of their nest egg.

  • Investors’ top worries are not having enough money to live comfortably in retirement and experiencing significant investment losses in a market downturn.

  • Investment management and retirement planning are identified as the most important adviser services across all age groups.

LONDON, ENGLAND, 1 NOVEMBER 2017— A survey from Dimensional Fund Advisors finds investors planning for or in retirement want to understand how much they will be able to spend annually. The recent study of almost 19,000 global investors who work with financial advisers also revealed individuals worry about whether their investment portfolios will provide a comfortable standard of living in retirement and about the impact a market downturn may have on their savings.

How Much Investors Can Spend Annually in Retirement is Valued Information

While investment returns are important, performance is only one component of what investors are thinking about as they plan for the future. Instead of simply focusing on the size of their nest egg, investors are attuned to how much they will be able to spend each year in retirement.

The survey asks investors who are planning for or in retirement to identify the most valuable information their adviser can provide:

    When planning for retirement:

  • Amount of money they can spend each year in retirement (28%)

  • Likelihood of achieving their retirement goals (28%)

  • Total amount of money they will have for retirement (22%)

  • In retirement:

  • Amount of money they can spend each year (33%)

  • Average annual returns they can expect during retirement years (24%)

  • Total amount of money they will have for retirement (23%)

“The survey shows that individuals are thinking about what their income in retirement will be, and we are encouraged by this finding,” says Stephen Clark, Head of Global Institutional Services and President, Dimensional International. “We believe this is one of the most important things that investors saving for retirement need to consider and plan for—what their consumption needs will be in the future and if they will be able to afford them.”

Investors Worry About Their Retirement Lifestyle

When asked what their greatest fear is about their personal finances, investors cite four key worries:

  • Not having enough money to live comfortably in retirement (37%)

  • Experiencing a significant investment loss in a market downturn (31%)

  • Outliving my money (13%)

  • Incurring unforeseen expenses (12%)

“It’s natural for investors to have fears about what is likely their most important financial goal—saving for retirement,” says Dave Butler, Dimensional Co-CEO and Head of Global Financial Advisor Services. “In our experience, advisers who help their clients understand what they can and can’t control are able to create a different investing experience, which helps ease their clients’ concerns.”

The survey also reveals that investors of varying demographics are aligned globally in their responses. What matters to investors in the US also matters to investors in Canada, Europe and Australia and New Zealand.




About the Survey

Dimensional launched the Investor Feedback Survey with US investors in 2016 and expanded the survey globally in 2017. Today, the survey is one of the largest of its kind in the industry. During February and March of this year, almost 19,000 investors who are clients of financial advisers who work with Dimensional completed the survey in the US, Canada, Europe, and Australia and New Zealand. Learn more at eu.dimensional.com/2017-investor-survey-insights.

About Dimensional

Dimensional Fund Advisors is a leading global investment firm that has been translating academic research into practical investment solutions since 1981. Guided by a strong belief in markets, we help investors pursue higher expected returns through advanced portfolio design and careful implementation. With clients around the world, Dimensional has 12 offices in eight countries and global assets under management of $548 billion (USD) as of 30 September 2017. Learn more at eu.dimensional.com.

Where issued by Dimensional Ireland Limited: Issued by Dimensional Ireland Limited (DIL), with registered office 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland. DIL is regulated by the Central Bank of Ireland (Registration No. C185067).

Where issued by Dimensional Fund Advisors Ltd.: Issued by Dimensional Fund Advisors Ltd. (DFAL), 20 Triton Street, Regent’s Place, London, NW1 3BF. Company Number 02569601. DFAL is authorised and regulated by the Financial Conduct Authority (FCA) - Firm Reference No. 150100.  

DIL and DFAL as applicable, (each an “Issuing Entity”, as the context requires) do not give financial advice. You are responsible for deciding whether an investment is suitable for your personal circumstances, and we recommend that a financial adviser helps you with that decision. Please read the ‘Important Information’.

The Issuing Entity issues information and materials in English and may also issue information and materials in certain other languages. The recipient’s continued acceptance of information and materials from the Issuing Entity will constitute the recipient’s consent to be provided with such information and materials, where relevant, in more than one language.

This material is provided for information purposes use only. It does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Any entity responsible for forwarding this material to other parties takes responsibility for ensuring compliance with all financial promotion laws, rules and regulations. It is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by the Issuing Entity to be reliable, but the Issuing Entity makes no representation as to their accuracy or completeness. The Issuing Entity has reasonable grounds to believe that all factual information herein is true as at the date of this document. The Issuing Entity accepts no liability for loss arising from the use of this material.

“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.