The survey found a significant majority of participants (80%) believe a guaranteed monthly payout benefit is a “must have,” even if it means compromising some access to their retirement savings. More than half (55%) see generating a stable income as a top priority versus generating returns (27%), or preservation of capital (25%).
Sixty-nine percent of respondents believe some sort of guaranteed monthly income stream will be necessary in addition to Social Security. Nearly two-thirds (64%) plan to take monthly withdrawals to cover their expenses, while only 6% prefer a lump-sum payout from their plans.
While a majority of plan participants are satisfied with the quality of support they receive from their plan, there remains an opportunity for plan sponsors to help participants establish guaranteed income during retirement.
Retirees’ lack of confidence as they approach retirement is shaping their decisions about transitioning to decumulation. Only 24% are confident they have saved enough to retire comfortably and nearly half (46%) are not planning on retiring until after age 66, with 15% expecting to hold out until after age 70.
In the run-up to retirement, catching up on savings takes a back seat to generating returns and preserving capital. As they near retirement, however, most (55%) shift their focus to generating a stable income in retirement.
“Participants are looking forward to life in retirement, and they want to be able to enjoy their golden years without financial stress,” said Fredrik Axsater, managing director and head of global Defined Contribution for SSgA. “They need guidance on what do with the savings they have accumulated—how to spend it and how to make it last.”
SSgA’s DC Investor Survey, conducted jointly with TRC Market Research, surveyed nearly 1,500 employees, ages 40 to 70, who participate in 401(k), 403(b), 457 and profit-sharing plans.
To view the complete results from SSgA’s Biannual DC Investor Survey, visit www.ssga.com/dc/theparticipant.