The survey from the LIMRA Secure Retirement Institute (SRI) shows nine in 10 U.S. workers see such projections as somewhat or very helpful. The findings also describe employees’ top concerns about the validity of, and calculations behind, income projections.
“Providing an estimate of what their monthly income will be in retirement has been well received by most U.S. workers,” says Alison Salka, corporate vice president and research director for the LIMRA SRI in Windsor, Connecticut. “The survey suggests that workers are interested in a clear explanation of how the estimates were calculated and need additional information to provide context to the projections.”
Forty-five percent of workers who find retirement income projections less than helpful say they either doubt the accuracy of the results or don’t understand the projection calculations. Two in five say the information presented is too hypothetical, while 17% say the projections do not capture all of their retirement savings. A chart presenting this data can be seen here.
“Many consumers do not have a good idea what their current monthly income or expenses are. A prior SRI survey found that nearly a quarter felt they needed help with basic budgeting skills,” notes Salka. “This, coupled with unknowns like inflation and taxes, can make any retirement projections seem abstract.”
The survey results also show that just half of U.S. workers have seen a monthly retirement income projection. Women and workers with annual incomes under $75,000 were less likely to have seen an estimate of their monthly income in retirement than men or workers making $75,000 or more. Workers contributing to a defined contribution plan are nearly twice as likely as those who are not contributing to have seen a retirement income projection (67% vs. 35%).
The federal government is aware of the heightened interest in lifetime and/or retirement income projections. In fact, the Department of Labor is currently evaluating comments it has received about including such projections in participant statements. In September, Assistant Secretary of Labor Phyllis Borzi noted that there was widespread agreement among commenters that these projections are a good way of educating participants (see “Income Projections Showing Participants a Better Way”).
The survey queried 2,024 people across the United States during the month of October.