A new survey from LIMRA, a market research organization in the life insurance industry, has found that most pre-retirees don’t consider annuities as much of a source of income in retirement. Most are not doing anything to insure retirement income against market risk or longevity risk.
The research involved an online survey with 1,050 participants, all U.S. adults ages 50 through 75. All subjects were at least working part-time, and classified as “pre-retirees” by LIMRA analysts. Participants were asked to estimate how much of their post-retirement income they expect to get from Social Security, retirement plan savings, other personal savings and investments, earnings from work, pensions and annuities. According to a recent article from ThinkAdvisor, these were the results:
- Participants expect to get just 3% of retirement income from annuities. Annuities actually accounted for a much smaller portion of participants’ expected retirement income when compared to the other five potential sources.
- 32% of retirement income was expected to come from Social Security, the top-ranked income source.
- More affluent participants were more likely to count on annuity income in retirement, but not by much.
- Participants with $500,000 to $999,999 in assets claimed to expect to get 7% of income from annuities, and only 2% from working. They also expect to get 13% of their income from Social Security.
- Pre-retirees in the highest asset category, $1 million or more, said they expect to get 4% of their income from annuities, 6% from Social Security and 6% from working.
Written by Rachel Summit