Give me reliability and flexibility
Our 2022 retirement income study focused on plan sponsor and member preferences for turning defined contribution (DC) savings into retirement income. We teamed with leading research firm Greenwald Research on an extensive study involving connecting with 100 plan sponsors and consultants and more than 1,000 members (all working for large US organizations with at least 5,000 employees) through online surveys, in-depth interviews, and virtual focus groups.
Plan members wanted the ability to choose among a range of retirement income solutions to give them a feeling of control over their financial future. They wanted in-plan options that would provide the reliability of steady income and the flexibility to make changes as needed. At the same time, having too much choice could overwhelm them.
Members who wanted more than one choice felt that the income solutions offered should be based on a monthly income amount to pay baseline expenses or flexible withdrawals to cover any ad-hoc expenses. However, no matter how many choices were available, 81% of members said they would need assistance picking the best retirement income solution(s) to help achieve their retirement goals.
Plan sponsors can assist members by offering both a guaranteed lifetime income solution for reliability and a non-guaranteed monthly income withdrawal solution for flexibility. Also, sponsors can highlight the resources and tools available to help members determine the optimal combination of solutions for their retirement goals and what percentage to allocate to each solution.
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Our latest defined contribution research reflects upon the evolving retirement industry today as it faces the pressing need to help plan members turn their DC plan savings into long-term retirement income. We connected with over 100 plan sponsors and 1,000 members to better understand their preferences for creating retirement income and what features, resources, and approaches to communications resonated across the generations.