Economic concerns drive interest in guaranteed retirement income

With recent market volatility changing perceptions about what it means to have a secure retirement, a new survey finds that more Americans are interested in having a guaranteed stream of retirement income.

According to a new joint poll by Kiplinger and Athene, three-quarters of respondents say they would like to have more guaranteed income in retirement than they already have or expect to have. Interestingly, more pre-retirees express this desire than current retirees, registering at 82% versus 69%, respectively.

The survey, conducted by Qualtrics, found that fears of a potential recession and uncertainty about the financial strength of Social Security are the top two financial concerns for respondents right now, with nearly three-quarters (74 %) saying they are worried about the impact of each. on their retirement. In addition, rising healthcare costs (72%) and inflation (71%) closely follow the other top threats cited in the survey.

Most respondents (57%) say having more guaranteed retirement income would particularly ease their fears of running out of money. More than a third (34%) say having more would ease concerns about market volatility.

“Retirees with enough guaranteed income to pay their fixed expenses can stay fully invested in the stock market during a downturn,” says Mark Solheim, editor of Kiplinger magazine. “And that can give their investments an opportunity to rebound once the market recovers.”

So how much guaranteed income is not enough, according to survey respondents?

  • Of those who already receive Social Security, more than three-quarters (76%) say it provides 20% or more of their retirement income, while 43% say it provides 50% or more.
  • Of those with a pension, nearly two-thirds (63%) say it provides or could provide 20% or more of their retirement income, while 28% say 50% or more.
  • Of those with an annuity, more than a third (34%) say it provides or could provide 20% or more of their retirement income, but only 7% say 50% or more.

The survey also shows how guaranteed lifetime income can help people feel more secure in retirement. Respondents without any type of pension report a higher level of concern on several measures than respondents with a pension.

While 62% of respondents without a pension are convinced that they will have enough retirement income to live comfortably, 74% of respondents with a pension are of the same opinion.

In addition, respondents without a lifetime income say they are more concerned about the impact of inflation on their retirement savings than those with an annuity (72% versus 66%). They are also even more likely to have already reduced their spending due to inflation (74% vs. 63%).

These respondents are also slightly more concerned about the following long-term threats to their retirement:

  • Recession (75% vs. 71%)
  • Financial strength of Social Security (75% vs. 69%)
  • Potential cost of long-term care (69% vs. 64%)

Moreover, among respondents who are already retired, those who have a lifetime income report being more satisfied with their life than those who do not have a lifetime income option. Here’s how both groups responded when asked if they agreed with the following statements:

  • I spend my time doing things I enjoy (88% vs. 78%)
  • I’m as busy as I want to be (87% vs. 75%)
  • I have enough money to buy the things I need (86% vs. 75%)
  • I enjoy life (85% vs. 78%)
  • I have enough money to splurge on the things I want (59% vs. 50%)

The poll was conducted by Qualtrics from June 21-24, 2022, with 818 respondents aged 50 or older, roughly split between retired and non-retired, as well as men and women. Respondents with household net worth less than $100,000 (excluding a primary residence) were not included in the survey.