The 28th annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute reported that only 17% of surveyed employees “feel very confident in their ability to live comfortably in retirement” as recently reported in Plan Sponsor.
Here are some of their findings:
- 3 in 10 employees with a DC plan intend to move “at least some” of their assets to an IRA upon retirement
- Less than 44% of retirees did this.
- 1 in 4 employees plan to leave some money in their DC plans
- 2 in 10 intend to buy a product that provides guaranteed lifetime income
- 7% of retirees did this.
- 8 in 10 indicated interest in either an in-plan investment option providing guaranteed monthly income for life or transferring funds to a financial product providing guaranteed income for life.
- 48% of employees with a DC plan indicated interest in longevity insurance (guaranteed income insurance that pays out at a specified age, i.e., 80 or 85).
- Less than 2 out of 10 retirees expressed a similar interest.
- 50% of employees feel confident that they know how much monthly income they will require in retirement and/or how to withdraw income from their savings.
- 1 in 8 are very confident in this regard.
- 8 in 10 employees with DC plans believe their plans will be either a major or minor source of retirement income.
Interest in guaranteed income products could be directly related to the low (17%) confidence level stated above. Only 47% of employees feel “somewhat confident”.
Additionally, the survey discovered that employee expectations could be providing a false sense of confidence. They reported that employees “expect to retire later than retirees actually do”, and that many employees expect to work in retirement:
- 2 of every 3 expect work to be a part of their income, but
- Only 1 of every 4 retirees indicated that work provides a source of income.