Americans will need 70 percent to 90 percent of their pre-retirement income to maintain their standard of living in retirement, yet one-third (33 percent) of respondents who haven’t retired believe they will need only 25 to 50 percent of pre-retirement income, and another third (33 percent) believe they will need 50 to 75 percent. Only one-fifth (21 percent) of those surveyed believe they will need more than 75 percent of pre-retirement income to live comfortably in retirement.
One in three Americans say that having guaranteed monthly income in retirement is their top priority, but 72 percent aren’t sure if their retirement plan has a lifetime income option, according to a survey by TIAA-CREF.
Another 40 percent of respondents said they want their savings to be safe regardless of what happens in the financial markets.
Forty-four percent of survey respondents said they are somewhat or very concerned they may run out of money in retirement, but only 21 percent said they expect to receive income from annuities.
“All workers deserve a secure retirement, but many need help in setting realistic plans to achieve that goal,” said Teresa Hassara, executive vice president of TIAA-CREF’s Institutional Business. “With life expectancies increasing rapidly, lifetime income options are essential to sustaining financial well-being over a retirement that could last for 30 or 40 years. Plan sponsors play a key role in educating employees on the value of these options.”
Experts also recommend saving at least 10 to 15 percent of income for retirement annually. However, the TIAA-CREF survey found that 44 percent of those who haven’t retired are saving 10 percent or less of their annual income – and another 21 percent aren’t saving for retirement at all.
“The survey shows that most Americans underestimate the amount of retirement income they will need,” Hassara said. “But a bigger concern is that more than one-fifth of Americans are not saving at all for retirement, and many more are not saving enough.”
KRC Research conducted the phone interview among a random sampling of 1,017 adults over the age of 18 from Jan. 3-5, 2014.