Only a third of workers have access to retirement plans that offer a “secure income stream for life,” and more than 70 percent support legislation to make it easier for workplace plans to offer lifetime income products like annuities.
The findings from the 2017 TIAA Lifetime Income Survey note that given a choice between receiving a $500,000 lump sum at retirement or getting $2,700/month for life, almost two-thirds would go with the latter.
Among those who don’t have access to guaranteed products or aren’t sure if they have access to such products, half would like such an option.
“A steady stream of income in retirement helps cover your expenses, no matter how long your retirement lasts,” Ron Pressman, chief executive officer of Institutional Financial Services at TIAA, said in a statement. “Lifetime income helps ensure Americans have the financial security they need in their retired years–it’s not a ‘nice-to-have,’ it’s an absolute necessity.”
In fact, most American adults who are not retired support legislative changes that would help them get more information about, and access to, lifetime income within their workplace retirement plans.
- 71 percent support legislation to make it easier for employer-based retirement plans to include lifetime income products, such as annuities, as investment options.
- 67 percent favor legislation that requires retirement account statements to include an estimate of monthly income in retirement.
Though many Americans would like to receive access to retirement income they cannot outlive, only half (49 percent) of non-retirees are familiar with annuities–which TIAA notes is “the only financial instruments (other than Social Security) that can provide a guaranteed stream of income during retirement.”
Even fewer non-retirees (13 percent) have purchased an annuity, though another 31 percent say they plan to do so.
“Americans should give annuities a second–or, in many cases, a first–look because they can provide the reliability and security that is so critical as the average length of retirement grows,” Pressman added. “The more you know about annuities, the better you can evaluate your options and select the investment products that best suit your financial needs and goals.”