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Consumer Interest in Guaranteed Lifetime Income Options Increasing

Consumer Interest in Guaranteed Lifetime Income Options Increasing

According to various sources, the consumer “craving” for guaranteed income options is on the rise. One area in which it is growing is workplace retirement plans.

Prudential Retirement reports that 78% of employer plan participants who say they’re familiar with guaranteed lifetime income options believe it’s “very important” to include them in workplace savings plans. Furthermore, 77% of plan participants indicated they would choose a guaranteed lifetime income option, if available.

These discoveries match prior findings. In past research, LIMRA has found 80% of U.S. workers would like a guaranteed income option in their workplace savings plan. General consumer interest in guaranteed income is also strong. LIMRA research shows 70% of retirees and pre-retirees say having enough money to last their lifetime is a top priority.

The Prudential study yielded many other insights:

• 54% say they believe offering guaranteed income options in employer plans would yield better-than-average outcomes in retirement.
• 80% will use their workplace savings plans as their primary lifetime income sources over other sources, including Social Security.
• 45% worry they won’t be able to meet retirement goals with current plans.

Despite these trends, most employers don’t offer annuity options in their plan offerings. Around 35,000 defined-contribution plans offer guaranteed lifetime income options – about 4% of the plan option landscape, at present.

What Does This Mean for Consumers?

Today, retirement preparation is largely an individual affair. In the past, we have discussed how workers benefited from employer-sponsored lifetime income-generating defined-benefit pensions. Since those days, workplace plan options have shifted to defined-contribution plan offerings. This can be seen in the decline in the number of defined-benefit plans over time.

According to the U.S. Department of Labor, since their height in 1983 to 2013, the number of defined-benefit plans declined 74.5%. Since 1983, defined-contribution plans have increased 48.9%. This increase in defined-contribution plans is also observable from the mid-1970s until the present.

With the rigors of retirement preparation now up to us, so is making certain we’ll have enough income in retirement. Many Americans can expect to spend 20 years or more in retirement. According to data from the CDC, a 65-year-old couple today has a 73% chance of one of them living until age 90. This longevity brings more years to plan for in retirement, including being sure you have sufficient income for all those years.

How can Income Needs be Met?

Depending on someone’s needs and circumstances, an annuity can provide financial security with a guaranteed income stream. It’s designed to help consumers achieve long-term financial goals, whether they want a guaranteed income anywhere from 10 years to the rest of their lifetime.

To determine if an annuity may be a good fit for your needs, it’s advisable to work with a financial professional. can help you connect with someone directly.

Use our Find a Licensed Advisor section to connect directly with an independent financial professional, and to request a personal strategy session to discuss your needs and goals. And should you have any questions or concerns, call 877.476.9723.

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