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.
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
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%
We surveyed a national sampling of 840 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 by Brown Oak Audience Insights from June 11 to June 13, 2020 and has a 3.4% margin of error.
*Respondents were asked to choose all applicable options.
**Percentages do not add up to 100% due to rounding.
Should I Trade Stocks or Options?
Answering the question "should I trade stocks or options" will depend on your own risk tolerance, investing objectives and understanding of market dynamics.
By Jared Hoffmann Published
This Is How You Can Be a Snowbird in Retirement
There’s a lot to consider, and warm weather shouldn’t be the only deciding factor. For instance, will you rent or buy? What’s the tax and health care situation?
By Tony Drake, CFP®, Investment Advisor Representative Published
Retirees, It's Not Too Late to Buy Life Insurance
life insurance Improvements in underwriting have made it easier to qualify for life insurance, which can be a useful estate-planning tool.
By David Rodeck Published
Best Banks for Retirees
banking Kiplinger's 2023 list of the best banks for retirees.
By Lisa Gerstner Published
2023 Investment Outlook’s Big Question Focuses on Recession
Fundamentals, earnings and diversification are key after a year that left us feeling like we have a bit of a hangover.
By Michael Aloi, CFP® Published
As the Market Falls, New Retirees Need a Plan
retirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
By David Rodeck Published
Retirees: Your Next Companion May Be a Robot
happy retirement Robots may help fill the gap left by a shortage of humans to help older adults live independently.
By Alina Tugend Published
Using Your 401(k) to Delay Getting Social Security and Increase Payments
retirement Your 401(k) can be a bridge from retirement to higher monthly income.
By Elaine Silvestrini Published
How Do I Stop Robocalls From Scamming Me?
retirement The scammers have automated their efforts to separate you from your money. We have ways to make it stop.
By Elaine Silvestrini Published
A Kiplinger-ATHENE Poll: Retirees Are Worried About Money
Making Your Money Last Concerns about recession, inflation and health care costs weigh on retirees and near retirees.
By the editors of Kiplinger's Personal Finance Published