Financial Engines has launched a Retirement Checkup service for near-retirees age 50 and older that finds the outlook is not as grim as people might think. Only modest increases in savings and a slight delay in retirement can put near-retirees back on track.

The Retirement Checkup, available at no extra charge to those whose 401(k) portfolios are managed by Financial Engines, works as a simple phone conversation with a licensed Financial Engines adviser to help people understand where they stand with their investments, savings and retirement income. The aim is to help them make the needed changes to recover from the steep market losses in 2008.


The advisers take a total-portfolio view, asking investors about additional sources of income earmarked for retirement, including Social Security, and helping them adjust, if necessary, their retirement income goals.

Early findings show that nearly three-quarters of people, 73%, make adjustments as a result of the advice, and, on average, it raises the outlook for annual income in retirement by 20%, or $6,200 a year. Financial Engines has been testing the service and will roll it out in July.

As a result of the service, 48% delayed their retirement age, with 66 being the average new target retirement age. Twenty-two percent increased their savings rate at a median of 3%. Thirty-percent had the adviser take into account other savings, investments or retirement income. After going through the exercise, 74% said they felt more confident about their expected life in retirement, and 79% said the chance to speak with a licensed adviser was important.

The average age of those who took advantage of the Retirement Income was 57 with an average account balance of $137,000 and a median salary of $64,000.

“The market losses of 2008 were painful. Investors won’t be able to asset-allocate their way out of the losses they suffered,” said Ken Fine, executive vice president of marketing at Financial Engines. “However, there are concrete things near-retirees can do to recover, but they need help to do this.”

Financial Engines also emphasizes that should near-retirees stay in an all-cash portfolio, as many did following 2008, they will have far more work to do to get back on track, having to delay retirement until age 70 or older.

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