What do participants really think about guaranteed retirement income? 96% of retirees who took monthly income at retirement instead of a lump sum payment are happy with their choice and 62%1 of current participants are worried about generating their own retirement income. Then why do so few take advantage of guaranteed solutions?
The answer may be that offering an income solution is only the first step. Plan sponsors need to use plan design, behavioral finance, and default solutions to shift participant focus from accumulating savings to protecting retirement spending.
Our latest paper discusses the need for retirement income, details the biases that prevent participants from using income solutions, and offers insights into how to use plan design to drive adoption.
1Source: 2019 BlackRock DC Pulse Survey.