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Financial Planning

A Kiplinger-Alliance for Lifetime Income Poll: Americans & Retirement Security

The majority of respondents in our poll would welcome more guaranteed income.

Americans are generally upbeat about their prospects for a secure and comfortable retirement, even after feeling the effects of the coronavirus pandemic and stock market volatility. But preretirees are less confident than those already retired about creating a secure income stream in retirement.

Those are among the conclusions of a new poll conducted by Kiplinger’s Personal Finance, in partnership with the Alliance for Lifetime Income, a trade group that helps educate consumers about how to protect assets in retirement.

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The pandemic-induced bear market in February and March dampened the retirement investments of nearly two-thirds of respondents. And a majority (56%) of those polled say they would like more guaranteed income.

Even so, nearly three-fourths of respondents are very or somewhat confident that they can create a secure income stream, or “paycheck,” in retirement. Part of the reason: About half of preretirees and 70% of retirees in our survey receive a pension, although for more than half of them it is a modest monthly income of $2,500 or less. Women, respondents in their fifties and those with net worth of less than $500,000 are somewhat less confident about achieving a secure retirement.

We’ve included highlights from the poll here (figures are medians unless otherwise indicated).

What sources of retirement income (beyond Social Security) do you expect to receive?*

  • Withdrawals from a retirement savings plan: 66%
  • Pension from my employer: 50%
  • Interest income from CDs and savings accounts: 39%
  • Income from bonds, dividend-paying stocks or REITs: 33%
  • Annuity income: 21%
  • Rental income from real estate: 11%
  • Income from a trust: 5%
  • Other: 6%
  • None: 3%

How confident are you that you have or will have enough income to live comfortably in retirement?**

  • Very confident: 25%
  • Somewhat confident: 48%
  • Neither confident nor unconfident: 17%
  • Somewhat unconfident: 8%
  • Very unconfident: 3%

Do you have a plan for how you will draw down your retirement savings?

  • I don’t plan to touch my principal. My living expenses will be covered by Social Security, investment income, a pension or annuity: 28%
  • I plan to withdraw an amount each year that will rise or fall depending on returns: 18%
  • I plan to use a rule of thumb, such as the 4% rule, as a guide: 15%
  • I’m leaving it up to my financial adviser: 12%
  • I plan to pay my bills from my savings, just as I do now: 11%
  • No, and that worries me: 9%
  • No, but I will go back to work if my money runs low: 5%
  • Other: 2%

Do you work with a professional financial adviser for your retirement savings and investments?

  • Yes: 50%
  • No 50%

Would you be willing to put a portion of your retirement savings into an annuity that would guarantee a monthly income for the rest of your life?**

  • Not sure: 35%
  • No, I would not consider this: 26%
  • Yes, in the future: 23%
  • Yes, I have already done so: 17%

Which of the following are you very or somewhat worried about during retirement?*

  • Not being able to afford long-term care if I or my spouse needs it: 65%
  • Running out of money when I’m older: 58%
  • Not being able to afford quality health care: 55%
  • Being too cautious financially and not enjoying retirement: 53%
  • Not having enough money to live comfortably: 53%
  • Not being able to travel as much as I want: 45%
  • Not getting a regular paycheck: 39%
  • Not being able to find new activities to fill my time: 29%
  • Leaving a job that I enjoy: 28%
  • Having to rely on my adult children for financial support: 23%

Percentage of respondents who took (or plan to take) Social Security before full retirement age

  • 31%

Why did you claim Social Security benefits early?*

  • I was concerned about future benefit cuts: 24%
  • I needed more income: 15%
  • To maximize benefits with my spouse: 15%
  • I wanted to invest my benefits: 12%
  • Longevity doesn’t run in my family: 11%
  • I wanted to delay tapping my portfolio: 11%
  • Health issues made it impossible for me to continue working: 8%
  • Other: 24%

Nearly 30% of those in our survey who have an employer retirement savings plan have the option to invest a portion of their savings in an annuity. Have you done so?

  • Yes: 66%
  • No: 34%

Methodology

We surveyed a national sampling of Americans between the ages of 50 and 75, equally divided between men and women, who had a net worth of at least $100,000. The poll was conducted from June 11 to June 13, 2020.

*Respondents were asked to choose all applicable options.

**Percentages do not add up to 100% due to rounding.

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