Eighty percent of people saving for retirement consider income guarantees a must-have, even if it means giving up some access to their savings, a survey released Wednesday by State Street Global Advisors found. Almost 70% said a guaranteed monthly income stream will be necessary to supplement Social Security.
“Participants are looking forward to life in retirement, and they want to be able to enjoy their golden years without financial stress,” Fredrik Axsater, managing director and head of global defined contribution for SSgA, said in a statement. “They need guidance on what do with the savings they have accumulated–how to spend it and how to make it last.”
Over half of respondents said stable income was a top priority, compared to about a quarter who said generating returns or preserving capital, the survey found. Almost two-thirds said they’ll take monthly withdrawals from their plan, and just 6% plan to take a lump sum when they retire.
The survey found respondents clearly identify themselves as savers. Almost half of respondents said they like to save and almost all of them say they’ve been doing it for at least 10 years. Almost 70% said they started saving more than 20 years before their estimated retirement age. And, although only 24% said they’re very confident they’ve saved enough to retire comfortably, 44% say they’re confident they’re on track to afford the kind of lifestyle they want to live when they’re done working.
When that will happen though is a subject of some debate. Almost half are planning on working until they’re at least 66 and 15% said they’ll probably work past 70. The survey found more people are working longer by choice, too, not necessarily because they have to.
SSgA found that plan participants expect their plan sponsor to be only partially involved in their transition from accumulation to decumulation, but they are looking to them for help. Younger savers in particular were more likely to expect their employers to be involved in retirement planning.
“As workers shift from saving for retirement to spending in retirement, they are evaluating their investment choices and looking to plan sponsors to help them make that transition,” Axsater said. “Plan sponsors should seize this opportunity to begin a dialogue with participants about how to achieve retirement security.”
The survey found 62% of respondents are satisfied with their employer’s DC plan, but if there’s room for improvement anywhere, it’s in investment education. Forty-five percent of respondents put themselves right in the middle of the spectrum of investment expertise. By comparison, 2% consider themselves experts and 13% said they have no expertise whatsoever.
Still, over a third are making all of their own financial decisions, and 43% are making most of their decisions with some input from an advisor.
The most valued transition services plan sponsors offer their participants are one-on-one advice and information seminars.
For the report, TRC Market Research surveyed nearly 1,500 people between ages 40 and 70 who participate in 401(k), 403(b), 457 and profit sharing plans.