Guaranteed income streams can increase retirement confidence

2018 Retirement Confidence Survey reveals trends among workers and retirees, highlights impact of guaranteed income

(Washington)– Three-fourths of American retirees are confident they and their spouse will have enough money to live comfortably throughout their retirement years, according to the 2018 Retirement Confidence Survey. Confidence jumps to 89 percent among retirees with guaranteed income from a defined benefit plan, compared to 59 percent without one.

The survey, now in its 28th year, is released by the nonpartisan Employee Benefit Research Institute and survey research firm Greenwald & Associates. Principal Financial Group^® co-sponsors the survey.

Less American workers counting on Social Security in retirement

While Social Security is expected to be a major source of income for 67 percent of retirees surveyed, those still working aren’t counting on it as much: only 36 percent said they expect Social Security will be a major source of income in retirement.

“The picture continues to change for people already in retirement compared to those who are still working. Younger generations face concerns about Social Security and fewer have access to a defined benefit plan than previous generations, leaving a big gap to fill as Americans approach retirement. We want to help with that transition, which is why we work with so many individuals, business owners and plan sponsors to help them make choices to have enough and save enough for retirement.”

Guaranteed income strategies can close the gap, build confidence

Four in five workers expressed interest in guaranteed lifetime income, with 28 percent “very interested” in putting all or some of their retirement plan savings into a guaranteed lifetime income product.

“Having the ability to guarantee a portion of your income for the rest of your life can be a powerful retirement strategy and a confidence-booster to know they won’t outlive their savings,” said Wiener.

Products like annuities or in-plan investment options take a piece of a person’s retirement pie and turn it into a guaranteed income stream. Principal launched the Principal Pension Builder^SM as an in-plan option in 2015 that lets participants build a steady stream of guaranteed income for life by directing a portion of their retirement plan contributions into a deferred income annuity.

“At the end of the day, we know confidence is the key driver to financial decision-making, and we want to empower people to feel educated and in-control of their future,” added Wiener. “For younger workers, time is on your side. There are so many tools and resources to help you plan. Don’t be afraid to take the first step.”