Most Americans don't know how to spend down their nest eggs, a survey found.

Despite two decades of advice from the retirement industry about how to accumulate a magic number in retirement savings, many working Americans will never reach that goal, according to Pentegra Retirement Services.

This means the industry must shift focus to educating workers about how to maximize what they will manage to save.

A new poll released Tuesday by Pentegra Retirement Services, a multi-employer plan provider, shows how important educating workers is.

Fifty-six percent of survey participants with retirement savings had no distribution plan for how they would access and stretch their money after retirement, and 20 percent had not given this any thought at all.

Harris Poll conducted a 28-question online survey in mid-April of 2,095 adults ages 18 and older, among whom 1,063 were currently working and not already retired.

Working Americans in the survey planned to retire on average at age 66, and one in five did not plan to retire at all.

Among those who said they would take Social Security benefits, they assumed they would start receiving these on average at age 67.

On average, respondents who planned to retire thought they would need $3,200 per month to live on after they stopped working, and a fifth thought they would need $5,000 or more.

“Based on the average household income of $52,000, this number may seem practical at first glance,” Rich Rausser, Pentegra’s senior vice president of client services, said in a statement.

“But many people do not factor in having to pay for health coverage and cost-of-living increases when estimating how much they will realistically need,” he said.

The survey also uncovered a lack of understanding and awareness of options available to access retirement savings, with less than a third of respondents very familiar with each of the following options:

  • Lump-sum payouts, 24 percent

  • Routine quarterly or monthly payments, 29 percent

  • Annuities for themselves (guaranteed monthly payment over their lifetime), 23 percent

  • Annuity for themselves for life and the life of their beneficiaries, 17 percent, with one in four employed adults not even aware that this option existed

“More people need to know about these annuities,” Rausser said. “They take the stress and guesswork out of distribution, stretching your savings as far as possible.”

He said Pentegra called annuities “pension-izing”: meaning they replicate some of the most important features of pension plans. “These were features that made a traditional retirement simple when pensions were more commonplace,” he said.

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