More than 70% of workers say they would choose to work for or stay with a company that offers access to guaranteed lifetime income in retirement over one that does not, TIAA’s 2021 Lifetime Income Survey reveals.
“So many people are considering career changes, and they are telling us that benefits that extend beyond traditional compensation measures, including access to enhanced retirement savings programs, are critical factors in their searches and decision making,” said TIAA President and CEO Thasunda Brown Duckett. “To attract and retain talent employers should ensure they are offering lifetime income solutions in their retirement plans and communicating the benefits they provide.”
“To attract and retain talent employers should ensure they are offering lifetime income solutions in their retirement plans and communicating the benefits they provide.”
Thasunda Brown Duckett, TIAA
The 2021 TIAA Lifetime Income Survey was fielded online from May 12 to May 30, 2021 and received responses from 1,001 Americans aged 27-75.
Six in 10 say they are highly interested in guaranteed lifetime income annuities offered through their employer’s retirement plan. Employees say having guaranteed lifetime income offers a sense of financial security (73%), provides spending flexibility and certainty around essential expenses (72%), makes knowing how much to save for retirement easier (68%), and creates security around market volatility (66%).
Yet confusion exists around the sources of guaranteed lifetime income. Almost half of respondents incorrectly identified non-lifetime income producing investment options as a source of guaranteed, ongoing income, such as mutual funds and certificates of deposits.
Improving employee retirement confidence
The survey found that about half of employees (56%) think their retirement savings are on track, but when asked about the longevity of their savings, the numbers drop significantly. Only 42% think their savings will last 20 years or more in retirement and only 32% believe their savings will last 30 or more years.
Among those who already have guaranteed lifetime income, 64% say they believe their retirement savings will last 30+ years. Having guaranteed lifetime income also decreased retirement concerns around stock market declines and low-interest rates for about one-third of respondents.
Another finding showed nearly half of respondents are extremely interested in owning an annuity when it is described as “pension-like.”
Given these findings, TIAA said in a statement that employers today have an opportunity to improve their employees’ retirement confidence while enhancing their efforts to recruit and retain employees by providing access to guaranteed lifetime income in their retirement plan design and communicating its benefits to their employees.
Additional findings from the TIAA 2021 Lifetime Income Survey can be found here.
SEE ALSO:
• Does The ‘Great Resignation’ Make Auto-Portability’s Case?
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
