With news of inflation and market volatility, a majority of participants in a new survey report concerns of running out of money in retirement.
According to a study from the Allianz Center for the Future of Retirement, 60% of participant surveyed worry that they will run out of money from their employer-sponsored retirement plan during retirement.
These worries are especially amplified for those with less than $200,000 in investable assets, as 66% of this demographic expressed concerns over exhausting savings during retirement.
The concern has led some to turn their interest towards lifetime income options. Seventy percent of survey participants said they would consider adding an annuity if available, with 79% of those who would consider buying an annuity preferring to contribute smaller amounts over time through payroll deductions.
Further, 86% of respondents to the Allianz Life survey said they prefer a steady income stream in retirement.
Still, some voiced concerns on whether incorporating an annuity option would be right for their retirement. Thirty percent of Americans who contribute to an employer-sponsored retirement plan question whether an annuity is a correct fit for their plan.
“As employer-sponsored plans become increasingly central to retirement savings, understanding participant preferences is essential,” says Matt Gray, head of Employer Markets at Allianz Life. “We’re seeing that Americans want retirement income strategies in those plans that can help their savings last for their lifetime. The driving concerns vary among plan participants who will seek out specific product features that can address the risks that matter most to them.”
Other concerns regarding retirement income usage include inflation (20%), market downturns (15%), major non-health-related expenses (14%), and health and long-term care costs (14%).
Such concerns highlight a need for robust retirement income programs, says Allianz Life.
“Designing better experiences and enhancing retirement outcomes hinges on a deep understanding of retirement plan participant preferences,” says Meghan Farrell, senior manager of Defined Contribution Insights for the Allianz Center for the Future of Retirement. “By harnessing our research capabilities and the wealth of knowledge and experience at Allianz Life, the center strives to provide practical insights and drive innovative thinking to address key challenges facing retirement planning.”
Additional findings from the Allianz Life “State of Lifetime Income Report” can be found here.
SEE ALSO:
How Using Guaranteed Lifetime Income Research Can Grow Your Book of Business
Retirees Prefer Spending Lifetime Income Over Savings
Plan Sponsors Focus on Retirement with Lifetime Income
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.