By Hal M. Bundrick
NEW YORK (MainStreet)--A gigantic market of investors is seeking assistance. 401(k) participants say their main goal is to have a secure stream of income in retirement, and they're looking for help to achieve that, according to a survey by State Street Global Advisors (SSgA).
Most of the survey participants (80%) believe that a guaranteed monthly payout benefit is a "must have," even if it means compromising some access to their retirement savings.
"Participants are looking forward to life in retirement, and they want to be able to enjoy their golden years without financial stress," says Fredrik Axsater, managing director and head of global Defined Contribution for SSgA. "They need guidance on what do with the savings they have accumulated -- how to spend it and how to make it last."
Less than one-quarter of respondents (24%) are confident that they've saved enough to retire comfortably. In fact, nearly half (46%) aren't planning on retiring until after age 66. Others are willing to wait even longer 15% say they won't retire until after age 70.
As they near retirement, over half (55%) of those surveyed begin to focus on generating a stable income in retirement.
"My employer could do a better job of laying out scenarios of how the drawdown would work," says Rich, a 55 year old plan participant in his survey comments. "People typically say 3%, 4% or 5% is a target, but I could use more specifics."
"As workers shift from saving for retirement to spending in retirement, they are evaluating their investment choices and looking to plan sponsors to help them make that transition," Axsater adds. "Plan sponsors should seize this opportunity to begin a dialogue with participants about how to achieve retirement security,"
Other findings from the survey include:
- 55% see generating a stable income as a top priority versus generating returns (27%), or preservation of capital (25%)
- 69% believe that some sort of guaranteed monthly income stream will be necessary in addition to Social Security
- 64% of respondents plan to take monthly withdrawals to cover their expenses while only 6% prefer a lump sum payout from their plans
--Written by Hal M. Bundrick