Participant Research

Show me the income

Invesco’s 2022 defined contribution research explores plan sponsor and participant preferences for creating retirement income.

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Executive summary

Our 2022 retirement income study concentrated on how plan participants think about retirement income in general, what type of in-plan solutions may be most attractive to them (and why), which resources would best resonate across a wide range of plan demographics, and how best to bridge the (savings to income) gap moving forward by examining how participant and plan sponsor mindsets differed at times.

Transcript: 2022 Show me the Income executive summary video

Our 2022 Retirement Income study reflects on the evolving retirement industry today as it faces the pressing need to help participants turn their DC plan savings into long-term retirement income.

Together with Greenwald Research, we connected with 118 plan sponsors and consultants and over 1,000 DC plan participants in the US (all working for large employers with more than 5,000 employees) through online surveys, in-depth interviews, and virtual focus groups.

Due to the global turmoil over the last few years, there’s been a shift in how employees define retirement, and how best they can prepare both mentally and financially. We found there’s an opportunity to provide participants retirement income-specific planning tools, investments, distribution options, and communications designed to help.

In our first finding, we learned that most plan sponsors recognized the importance of helping participants ease the transition from saving to income in retirement. First, by letting participants know they have the option to stay in the plan when they retire, and second, by offering retirement income solutions within the investment menu along with flexible distribution options.

While half of plan sponsors surveyed encouraged participants to stay in plan at retirement, more work needs to be done to generate awareness.

In our second finding, participants often had two intertwined fears First, outliving their retirement savings, and second, spending too much, too soon.

Only 22% were very confident they could create a retirement income strategy on their own.  Which includes determining how much of their retirement savings to withdraw, when and from which financial source.

We also found that participants wanted a reliable income stream to cover their expenses with the flexibility to withdrawal funds as needed – without running out of money along the way. They didn’t know what type of retirement income solutions could achieve this.

Yet when asked, participants felt both guaranteed lifetime income solutions and non-guaranteed monthly income withdrawal solutions would be a good fit for them, in different ways

In our fourth finding, we uncovered that few participants would put all their DC plan savings into just one retirement income solution. 90% of participants preferred two to three choices that included a guaranteed and non-guaranteed option.

Regardless of how many in-plan solutions were offered, eight in 10 participants wanted help choosing which solution would best fit their personal situation.

Finally, we found that three quarters of participants were eager for their employers to start the retirement income conversation earlier

While 78% of plan sponsors reported they provided specific retirement income generation communications, only 38% of participants reported they received those communications.

As participants rely on their DC plan as their largest income source in retirement, plan sponsors have a significant opportunity to help participants of all ages along their planning journey.

Request our white paper to view a complete checklist with detailed action steps for plan sponsors.

To learn more about the findings of our 2022 DC retirement income research study, visit our website or contact your Invesco DC professional.




Cited Invesco research is based on Invesco’s work with Greenwald Research. Invesco is not affiliated with Greenwald Research. Participant quotes are used with permission.

This material is for illustrative, informational and educational purposes only. If the illustrations herein are used outside of the designated audience, it is the respective user’s responsibility to ensure that such material complies with all applicable regulations and is filed with the appropriate regulatory bodies if so required. Words and phrases utilized should always be appropriate, applicable and provable. We make no guarantee that participation in this program or utilization of any of its content will result in increased business or higher participant rates.

The opinions expressed are subject to change without notice. These opinions may differ from those of other Invesco investment professionals. This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.

Annuities can be purchased within or outside of qualified retirement plans and traditional IRAs. Annuity benefits and features vary, so an investor should carefully consider whether this product is right for them. Some benefits may incur additional costs. Any guarantee associated with an annuity is subject to the claims-paying ability of the issuing life insurance company. Invesco does not offer Insurance products. All investing involves risk, including the risk of loss.

This is not intended to be legal or tax advice or to offer a comprehensive resource for tax qualified retirement plans. Any products referenced are not intended to represent any specific Invesco products.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco’s retail products and private placements. Both are indirect, wholly owned subsidiaries of Invesco Ltd.

DCRIR-VID-1-E  10/22              NA2451274            2022 Invesco Ltd.                             All rights reserved.

Key Insights from the research

In our retirement income study, we found that participants wanted both guaranteed and non-guaranteed retirement income solutions, flexible withdrawal options, and early communication about retirement.

  • Insight 01: Connecting savings with income

    Most plan sponsors recognized the importance of tightening the connection between a participant’s DC plan savings and their retirement income. Sponsors could encourage participants to stay in the plan at retirement by offering specific investments to help them create a regular stream of retirement income. 

    Source: Invesco participant survey, October 2021.

  • Insight 02: Overcoming fear and inertia

    Participants were fearful they would run out of money in retirement and lacked confidence in their ability to create a retirement income strategy. To help, plan sponsors could implement auto-enrollment into a retirement income solution as a strategy to create consistent income.

    Source: Invesco participant survey, October 2021.

  • Insight 03: Bridging the (income) gap

    Participants wanted a consistent, monthly income stream to reliably cover their baseline expenses with the flexibility to withdraw additional amounts to cover ad-hoc spending. Participants saw the potential advantages of monthly income withdrawal solutions (non-guaranteed) and guaranteed lifetime income solutions to achieve their retirement goals.

    Source: Invesco participant survey, October 2021.

  • Insight 04: Give me reliability + flexibility

    Participants desired at least two in-plan options to help provide the reliability of steady income and the flexibility to make changes as needed. They wanted their employers to help them choose how to split their DC plan savings between a guaranteed lifetime income solution and a non-guaranteed monthly income withdrawal solution.

    Source: Invesco participant survey, October 2021.

  • Insight 05: Jumpstart the retirement income conversation

    Most participants wanted their employers to start the retirement income conversation earlier (at hire or when they first join the plan) and continue it on a more frequent basis (annually at open enrollment).  And nearly two-thirds of participants were interested in an online tool to help compare retirement income options available in their plans.

    Source: Invesco participant survey, October 2021.

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Our latest defined contribution research reflects upon the evolving retirement industry today as it faces the pressing need to help participants turn their DC plan savings into long-term retirement income. We connected with over 100 plan sponsors and 1,000 participants to better understand their preferences for creating retirement income and what features, resources, and approaches to communications resonated across the generations.

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