Nearly one-third (31%) of those surveyed said they don’t know their plan’s vesting schedule, 40% don’t know what their payment options will be upon retirement or when leaving their company, and about one-quarter (27%) don’t know at what age they can begin to receive payments.
According to a news release, the majority of those surveyed (61%) said they have never inquired about how much money they will receive upon retirement. When asked to explain their passive approach to determining the monetary value of their pensions, 43% said they rely on their employer to provide the information when necessary and more than one in four (29%) said they lack knowledge about the plan and/or they do not know whom to ask for information.
On average, participants expect their pension benefits to supply almost one quarter of their retirement income, the survey found. Most (56%) said they will rely on their pension payouts to cover living expenses during their retirement years, rather than as “extra” money for expenses like travel or hobbies. The breakdown of expected sources of income in retirement, on average, is as follows: pensions (23%), defined contribution plans (27%), Social Security (26%), and savings/other (24 percent).
Most of the pension plan participants surveyed (56%) said they expect to receive annuitized payments from their plans when they retire. Just 10% plan to take lump sum payments, and 9% expect a combination of both a lump sum payment and a form of annuity. One-quarter of those surveyed said they don’t know how they will be paid. Among those surveyed who plan to receive only annuitized payments, the median expected amount is $1,500 a month. The median expected lump sum payment is $95,000.Fidelity examined the attitudes and behaviors of more than 500 corporate employees who participate in employer-sponsored pension plans nationwide.
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