PLANADVISER - May/June 2018 - 18

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Interest in Guaranteed Income
80% of DC participants want the security
THREE in 10 employees with a defined
contribution (DC) plan intend to roll
at least some of their assets into an
individual retirement account (IRA)
when they retire-less than the 44%
of retirees who have actually done
so, according to the Employee Benefit
Research Institute (EBRI)'s 28th annual
Retirement Confidence Survey (RCS).
One in four intend to leave at least
some money in their DC plan, but two
in 10 say they will use plan assets to
purchase a product that provides guaranteed
lifetime income-far more
than the 7% of retirees who have done
this. Eight in 10 DC plan participants
are very or somewhat interested in an
in-plan investment option that would
guarantee monthly income for life
in retirement, and the same number
express interest in taking money out of
their plan at retirement and moving it
to a financial product that would guarantee
them monthly income.
Employees with a DC plan also
express interest in longevity insurance-guaranteed
income products
that pay out once a specified age (80 or
85) is reached. Nearly half (48%) report
being very or somewhat interested in
these products, compared with fewer
than two in 10 retirees.
This interest in guaranteed income
products may be related to employees'
confidence level. The RCS found
that the share of workers who feel
very confident in their ability to live
comfortably in retirement remains
low, at just 17%. Forty-seven percent
are somewhat confident.
Only half of employees are confithey
know how much income
dent
they will need each month in retirement
or how to withdraw income from
their savings. -Rebecca Moore
Cost of Living Surprise
Health care, basic living and taxes each cost more than retirees expected
MANY retirees say they were taken
off guard by the expenses they have
encountered in retirement, according
to the Wells Fargo/Gallup Investor
and Retirement Optimism Index poll.
Thirty-seven percent said health care
costs are higher than they had anticipated;
27% point to everyday living
expenses and 26% to taxes, for their
unexpected cost.
The average age at which people
retire is 62, and 22% of retirees said
they retired earlier than they had
hoped. Women are slightly less likely
to say this (19%), but evidently more
men (27%) end up retiring earlier than
they had planned. Forty-five percent
of retirees started taking Social Security
before they reached full retirement
age, decreasing their monthly
premiums for life.
" Life events happen, and people
don't always get to choose when they
retire, which is why it's important
to have a well-thought-out plan that
maps
out different
retirement
age
scenarios and projected costs in retireSource:
Accenture
ment, " says Joe Ready, head of Wells
Fargo Institutional Retirement and
Trust. " This will help people saving for
retirement make the most informed
decisions possible. "
The poll also found that retirees
are more optimistic than non-retirees,
having scores of 155 and 134, respectively,
in the first quarter of this year.
Among non-retirees, only 20% have
calculated how much they will need
in retirement. Another 32% have estiTALKING
POINT
Help Wanted
Workers would like their employers to offer the following:
82%
More help
with retirement
planning
84%
Retirement
coaching
54%
Access to
a webinar
on retirement
education
50%
A mobile app
to learn about
retirement
planning
mated it, and 48% are unsure or have
yet to think about it. Twenty percent
have also calculated how much income
their retirement accounts will generate;
33% have estimated it; and 47% have
done neither. Eleven percent have tried
to figure out how much in taxes they
will pay on their retirement income,
22% have estimated it, and 67% have
done neither. Half of those who have
calculated retirement costs are confident
about the future. -Lee Barney
18 | planadviser.com may-june 2018
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PLANADVISER - May/June 2018

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