Retirees, and pre-retirees, seek flexibility and guaranteed lifetime income
A new study by the LIMRA Secure Retirement Institute found the majority of retirees and pre-retirees are more interested in income solutions that offer investment growth, flexibility, and guaranteed lifetime income than in those allowing them to maintain control over the management of their assets.
When asked to name the most important products or features they wanted in an income plan, 60 percent of retirees and pre-retirees said they would like an income that had the potential for investment growth. Flexibility in changing the amount of income was cited among 55 percent and just over half said income that is guaranteed for life was most important to them. In fact, when asked to assign points across their top five features, giving more points to their highest priorities, guaranteed lifetime income received by far the highest average allocated point totals.
A follow-up question asked why these income features were chosen. On income growth, the top reason cited was the expectation of living a long time in retirement. The top reasons for choosing income flexibility were the uncertainty of future expenses and having money for emergencies. Retirees and pre-retirees who prefer a guaranteed lifetime income said they chose this feature for peace of mind.
Fewer than half of those surveyed stated that controlling how their investments were managed or allocated was a top income feature. Since the economic crash in 2009, trends suggest that pre-retirees and retirees have put less emphasis on the control of how investments are managed in favor of securing an income for life.
LIMRA members can learn more about retirement income preferences by visiting: Finding the Right Mix: Retirement Attitudes and Preferences