The Hartford has found that American workers are increasingly valuing guaranteed income in retirement with younger workers markedly more attracted to such options than their older counterparts. The results were announced in The Hartford’s Guaranteed Retirement Income study.
In what could be part of the lingering effects of collapse-bred cynicism with regards to capital markets combined with the acknowledgment that the social security system will be a shadow of itself once they are ready to retire, younger workers are expressing a palpable longing for pension-like products.
The Hartford decided to commence the study after the introduction of The Hartford Lifetime Income (HLI), a patented investment option that allows 401(k) participants to use their savings to create pension-like income in retirement.
“Overall, the study confirms our own experience since January in offering Hartford Lifetime Income through employer-sponsored retirement plans across the country. We see broad acceptance of lifetime income among 401(k) participants of all ages, even younger workers who are decades from retiring,” said Patricia Harris, assistant vice president of product management for The Hartford’s Retirement Plans Group.
The study, which surveyed 2,500 Americans age 18 and older found that most respondents were very welcoming to the opportunity. Eighty-seven percent of all respondents say they find it “very” or “somewhat” appealing to be able to turn a portion of their retirement savings into guaranteed income. Highlighting the mass appeal to younger workers, 95% of them say the same, the highest level of any group surveyed. The same sentiment was expressed by 90% of those ages 30-39; 89% for ages 40-49; 88% of ages 50-59 and 77% of those 60 and older.
While conducting the study, age was found to be not the only gauge of how open people were to the guaranteed income option. The study found that both gender and income played significant roles.
The concept of guaranteed retirement income appeals most to those with a combined household annual income of $50,000-$74,000, 92% of that demographic would like their employer to offer a guaranteed retirement income that they cannot outlive. Eighty-seven percent of those earning $30,000-$49,000 feel the same way while 86% of those earning under $30,000 and 84% of earning $75,000 or more do.
Women were open to the option than their male counterparts with 89% having an interest compared to 84% of men.