Setting Sights on Retirement Income

Several factors are converging to make individuals think more about having an income stream in retirement. Longer life expectancies mean that people will be spending more time in retirement. Account balances are in the lower five-digit range, while many experts suggest balances in the six-figure (if not seven-figure) range would lead to a more secure retirement. In many cases, the expectations about retirement savings are diverging from the reality. A new study from ING U.S. Research finds that for those who have already retired, 33% report that they are experiencing a lower standard of living than when they were working. A mere 8% of pre-retirees thought they would have a lower standard of living as they moved into retirement. Four out of five (80%) would trade spending money today for a steady retirement income in the future. Some 37% believed that they would run out of money to support their desired lifestyle in retirement. Slightly over one-third believe that $500,000 would be sufficient in savings to allow for a steady, comfortable income in retirement, or had no idea how much would be needed, The importance of an income stream is echoed by a report from SSgA, which discovered that 55% value a stable income the highest as they approach retirement, versus 33% for protecting the value of one's savings, and 12% for having ready access to cash.

To address the important goal of generating a retirement income stream, it is important to also address the current financial pressures that many individuals are facing. Solving these sometimes-competing challenges should be an important element in reaching more secure retirements for more participants.