Steve Gresham (Credit: Alliance for Lifetime Income) Steve Gresham (Credit: Alliance for Lifetime Income)

U.S. consumers who have annuities or defined benefit pension plans seem to expect to depend less heavily on Social Security benefits than other U.S. consumers do.

The Alliance for Lifetime Income has reported that finding in a summary of results from an online survey of 1,015 U.S. adults ages 40 through 79.

The Washington-based group classifies annuity income and pension benefits as “protected income.”

Resources

  • The Alliance for Lifetime Income MUG page is available here.
  • An article about the Alliance for Lifetime Income forming a think tank is available here.

 

The survey participants without protected income said they expect to use Social Security benefits to cover about 41% of their essential expenses in retirement.

The survey participants with protected income expect to use Social Security to cover just 29% of the cost of essentials.

The alliance conducted the survey to support an effort to promote a new “M.U.G.” approach to retirement income planning.

The M.U.G. acronym refers to mortgage costs or other housing costs, utility bills, and grocery costs, and it reflects what the alliance sees as core expenses.

The alliance — which is backed by annuity issuers and other retirement services providers — also looked at what survey participants themselves see as essential expenses.

The survey participants  themselves agreed that the MUG items are essential items. The participants ranked those items in the top three, in terms of importance.

At least 84% of the participants ranked each of those three items as an essential.

Between 70% and 80% of the participants classified four other items as being essentials. The second tier of essential items included transportation-related expenses; health insurance and health care costs; telephone-related costs; and home Internet access costs.

Paying for home Internet access ranked above the ability to pay income taxes or buy clothing in terms of importances. About 68% described paying income taxes as an essential, and 56% described paying for clothing as an essential.

Steve Gresham, a senior educational advisor to the alliance, said in a comment about the MUG approach that he believes the MUG approach could help ground the income planning process in the realities of everyday life. “We can never make planning too simple,” Gresham said.

— Read Optimistic Women Are Different: Alliance for Lifetime Income, on ThinkAdvisor.

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