Almost half of Gen Xers and Millennials believe they won’t be able to retire, according to a new survey by USAA Life Insurance company.
Forty-nine percent of respondents said they cannot afford to retire, while four in 10 adults over the age of 18 said they are concerned over their retirement savings.
The report from USAA is the second this week regarding retirement readiness among Gen Xers. Prudential recently released its survey this week, finding that close to 30 million of those in the sandwich generation do not believe they have the proper savings to live comfortably in their retirement.
Lifetime income solutions, including annuities, can help these groups avoid the threats that market volatility, longevity risk, and sequence of returns risk bring, finds the two reports.
Yet, USAA found that while nearly six in 10 (58%) adults believe an annuity is a way to save for retirement, four in 10 (42%) do not understand what an annuity is. The findings highlight a continued need for retirement readiness tools within workforces, as 79% of adults believe it is “more important” to have a guaranteed monthly income in their retirement plan than a particular dollar saved, USAA said.
Lifetime income solutions have gained more attention in recent years from employees, despite big concerns from plan sponsors. A report released earlier this month by AllianceBernstein found participants are shifting their past views of lifetime income options.
When asked about the most important factor when saving for retirement, 31% of respondents said having a steady income stream was vital to them, while 21% answered “protection of principal” and 20% responded “growth as markets rise.”
Additional findings from the 2023 survey by USAA include:
- Older adults are more likely to correctly identify annuities as retirement savings. A majority of those ages 35-54 (54%) and 55+ (75%) say annuities are retirement savings, whereas adults 18-34 are more likely to say they don’t know (32%).
- Among younger adults 18-34, a majority say a guaranteed monthly income is more important (73%) and would choose monthly payments from the lottery (65%).
SEE ALSO:
- Despite Big Concerns, Plan Sponsors Know They Need Lifetime Income Options
- Economy has Retirement Savers Eyeing Guaranteed Lifetime Income, Financial Planning Options
- Participants Could Exhaust Retirement Savings Without Lifetime Income Strategies
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
