K-12 educators are better prepared for retirement if they work with a licensed financial professional, says a recent white paper. The researchers found that with advice, the 403(b) plan participants studied achieved higher retirement plan balances, made better decisions and had greater confidence.
In “The Value of the Advisor: The Impact of Advisors on Financial Outcomes Among K-12 Educators,” researchers for AXA Equitable Life found that the benefits of working with a professional for educators are not limited to account balances, but also include adoption of more effective financial behaviors and greater confidence in achieving retirement goals.
Other key findings included that educators who participate in 403(b)s and had the advice of a financial professional had:
- higher median account balances;
- greater diversification of funds in their accounts;
- greater ability to meet retirement goals;
- higher monthly contributions and more frequent increases to contribution amounts;
- more engagement in management of their investments; and
- higher satisfaction with their 403(b) plans and how well their investments were performing.
The researchers also found that more than half of the teachers said that they started contributing to their retirement plans earlier because of their financial professional, and almost two-thirds were confident that they will meet their retirement goals with such assistance. And a strong majority — 80% — agreed that financial professionals help them make the right investment choices.
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