Non-Retirees Want Retirement Income Certainty

Non-retired Americans are showing a clear desire for guaranteed income in retirement, according to a survey by Allianz Life Insurance Company of North America.

When asked to rate several factors related to creating a more secure retirement, the most popular selection was “having a guaranteed stream of income in retirement” (86%), outranking “having a 401(k)/403(b)/457 plan” (71%), in the Allianz Life survey.

When asked to rate their own personal needs, nearly half (47%) of non-retirees rated a guaranteed stream of income as the top retirement need they have yet to acquire in order to feel more secure. This was deemed far more important than the next highest selection – “a job that gives me a 401(k)/403(b)/457 plan” (27%) – and more than twice as important as “having a diverse portfolio of investments” (22%).  

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Only 8% of non-retirees say they own an annuity, and less than a quarter (18%) have guarantees through a pension. Nearly 40% indicate they own no retirement or investment products of any kind. In addition, 26% say they have no clear idea of what they would need in order to feel their retirement will be secure.

Majority of Younger Americans are Not Saving

An ING survey found that one quarter of Americans (28%) say nothing has gotten in their way of saving for retirement.

The ING Direct survey also found that a majority of Americans (89%) agree that saving for retirement should start with your first job and continue throughout your working life. More than a third (34%) of those who deduct a percentage of their paycheck and just under half (47%) of those who give a fixed amount, don’t know how much they currently contribute. And a third of Americans (33%) think it’s okay to defer retirement savings to pay for another need.

Americans of all ages and sexes are neglecting retirement planning, but there are clear differences between older and younger generations, ING found. And while women are often making financial and purchasing decisions for their households, the survey found they are not taking the same care as they plan for their own golden years.

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ING’s data found that most younger Americans are not heeding the call to save for retirement. Less than a third (32%) of those in their 20’s are currently contributing to a retirement plan. Student loans are clearly one of the contributing factors to a lack of a nest egg; one in five (21%) Americans in their 20’s say paying off student loans is a higher priority than retirement. Less than half have checked their credit score (43%) or read about financial planning (42%), and less than one in five (19%) have an emergency fund.

Conversely, older Americans are starting to wisen up, says ING. About half of those 40 or older have used a 401(k) to save for retirement. Nearly half (46%) of those in their 50's think they are saving enough for retirement. Less than half of those 50-59 have created a will (48%) or purchased term life insurance (49%). Almost all (91%) of those 50-59 believe saving for retirement should start with your first job and continue throughout your working life to ensure a secure retirement. More than half (54%) of those 50-59 disagree that just 5% yearly annual salary contribution to a retirement plan will provide a secure retirement.

As for gender differences, women aren't preparing for retirement as well as men are, but they are more likely to admit their mistakes. The survey revealed that women are more likely than men to say that they wish they had started saving for retirement earlier. And of those women, the majority (58%) wish they had started saving in their 20's.

National phone surveys were conducted in August and September 2011 among 2,000 adults over the age of 18. 

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