Monthly Income Projection Needs.
Byline: Rebecca Moore
Many Americans fail to understand how their retirement account balances will translate into income during their retirement years, LIMRA Secure Retirement Institute (SRI) research found.
More than half (52%) of U.S. workers ages 20 through 79 that the institute surveyed recently for its study said it is difficult to know how retirement savings will translate into monthly income.The study suggests that offering workers retirement-savings income estimates can help bridge this gap.
Fifty-two percent of respondents said they have seen an estimate of their retirement income. About four in 10 retirees reported wishing they had seen more frequent estimates of how much monthly income their savings would generate in retirement before they had retired.
Breaking down findings by generation, Baby Boomers were more apt to have seen an estimate of their monthly income than were Generation X or Millennials. According to a LIMRA SRI representative, “Viewing their monthly income in actual dollar amounts, rather than as a percentage of pre-retirement income, is more meaningful to Baby Boomers. Because they’re closer to retirement than the younger generations, they may have a better sense of what their retirement expenses will be.”
Retirement income estimates help improve workers’ retirement decisions. After seeing their estimated income, almost half of all workers (48%) increased their retirement savings, they said. “This could have the greatest impact on the savings habits of younger workers, as they have more time to save,” the representative says. “Fifty-five percent of Millennials increased their retirement savings after seeing their estimated retirement income.”
Among workers who received an estimate of what their income would be in retirement, almost seven in 10 expressed confidence they would live the retirement lifestyle they desired, and seven in 10 said they were saving enough to live comfortably in retirement.