Lifetime Income: Building Confidence From Uncertainty
December 10, 2019 by Patrick C. Rowan
There is no doubt that preparing for retirement can be tricky. A recent study by TIAA found only 27 percent of Americans are highly confident they will never run out of money in retirement, leaving the majority (73 percent) worried about how they will make ends meet in retirement. What can advisors do to improve the financial confidence of their clients? Ensure their retirement savings strategy includes a method for guaranteeing income for the duration of their lives.
Historically, people valued a defined benefit pension plan at their job because they knew they would receive a paycheck as long as they worked and would continue to receive a “paycheck” after they retired. While the number of employers offering pensions has decreased dramatically in recent decades, most people still want this same benefit.
Of the individuals who participate in their company retirement plan, nearly seven in ten (69 percent) cite guaranteed income for life as one of their top two goals for their retirement plan. Almost half (45 percent) say that guaranteed income for life is their top goal.
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