Annuities in retirement plans are popular when offered, according to the survey.
The coronavirus pandemic has clawed into the confidence of Americans approaching or already in retirement, making annuities in retirement plans a popular option, according to a survey released Tuesday by Kiplinger’s Personal Finance magazine and the nonprofit Alliance for Lifetime Income.
Two-thirds of respondents with the option to invest in an annuity through an employer’s retirement plan said they had done so.
Overall, two in five survey participants said they had put or would consider putting a portion of their retirement savings into an annuity that would guarantee a monthly income for the rest of their lives.
Half of the survey sample of people between the ages of 50 and 75 said that they were less confident about living comfortably in retirement than they were before the pandemic’s onset.
Pessimism about their retirement prospects was higher in some groups than others:
- 56% of women vs. 43% of men
- 54% of people in their 50s vs. 46% of those 60 to 75
- 54% of people with less than $500,000 of net worth vs. 46% of wealthier people
- 53% of those not fully retired 53% vs. 37% of those fully retired
Sixty-five percent of respondents reported that their retirement investments had eroded since the March shutdown in the U.S., and nearly all said it was important to protect their retirement savings from volatility.
Fifty-six percent of respondents also said they would like more guaranteed income in retirement, rising to 78% of those in their 50s.
How much income would a majority be comfortable with?
A quarter of the sample said that about $1,000 a month would do, while 18% said $1,500 and one in five said $2,000.
“The pandemic and resulting market volatility have created a ‘Retirement Reset’ moment, where opinions and attitudes about retirement planning are shifting towards less risk and greater protection,” Jean Statler, chief executive officer of the Alliance for Lifetime Income, said in a statement.
Americans want protected income in their portfolios that will ensure that they will not run out of money in retirement, Statler said.
“Part of the reason [respondents] express confidence is because half of the pre-retirees and 70% of retirees in the survey expect to receive or currently receive a pension, even if it is a modest monthly income of $2,500 or less,” Mark Solheim, editor of Kiplinger’s Personal Finance, said in the statement.
The poll was conducted in mid-June among 840 Americans, equally divided between men and women, with a net household income of at least $100,000.
Read more on ThinkAdvisor.com