NEW YORK (TheStreet) — Over the past three years, financial planner Kyle Winkfield has seen a 50% increase in the number of clients approaching retirement who want a formal withdrawal plan for their retirement money.
"The conversation typically starts with them wanting to know if they will be OK in retirement and have enough money to keep them in the lifestyle they want,” said Winkfield who is president of The Winkfield Group in Rockville, Md.
Winkfield's observation is no surprise given that 63% of newly retired 66-year-olds have no plan for how much to withdraw from their IRAs or 401(k) plans, according to new research from T.Rowe Price.
“They are not taking out much money because it’s early in their retirement,” said Anne Coveney, senior manager of Thought Leadership, the research arm of T. Rowe Price (TROW) that uncovers investor trends and behaviors. “As they get further along, their situations might change in terms of health care, so they do need a withdrawal plan because they will need that money.”
The T. Rowe Price study of people who have been retired one and five years found that 63% withdraw from investment funds on an as-needed basis and live mainly on Social Security or a pension.
“We’re seeing the first generation of retirees who have some accounts beyond just a pension,” Coveney said. “They may have pensions as well as 401(k) plans, but the pensions are not as much of a source of income as in previous generations."