PLANSPONSOR - April/May 2021 - 17
TOTAL BENEFITS | COVER STORY
SOLUTION
READY
Sponsors have been hesitant to offer them,
and participants don't understand them,
but income options are getting a fresh look
FINANCIAL SERVICES advertising on cable television and in magazines depicts retirement as a
sun-flooded world of white sand beaches and sailboats-those retirees are finally spending their hardwon
assets and living it up! The reality, though, may be somewhat different: Surveys of U.S. retirees
suggest that many are not eager to spend down their savings, but instead focus on frugality, preserving
their capital, and, in a meaningful number of cases, growing it further.
A 2016 survey by the Society of Actuaries, covering the middle income, and asset, ranges in the
U.S. and Canada, showed that recent retirees had carried out little financial planning before leaving
work and that, as retired life wore on, they had " absorbed and adjusted " their spending to lower levels.
Echoing that poll, J.P. Morgan Asset Management estimates that annual spending for college-degree
households averages about $81,000 at ages 55 to 64 but steadily drops to $56,000 for those 75 and older.
Presently, about 50 million people in the U.S. are 65 or older, and within such a large group
the circumstances vary greatly. But toward the goal of optimizing retirement for many-that is, not
having to unduly scrimp on spending-industry consultants and product providers see a greater role
for defined-contribution (DC)-plan-related retirement income solutions, in particular annuities. And
this is supported by a wave of recent regulations, new product designs and operational changes.
A Need Unmet
A growing number of people will rely on their DC plan assets as a main source of retirement income and
surely need help solving the complex problem of converting assets to income over time. The challenge
is compounded by the small balances most people have built up: Vanguard Group's " How America
Saves 2020 " reports that, in Vanguard's plans, participants ages 65 and older claim average balances
Art by Alfonso de Anda
PLANSPONSOR.COM April - May 2021 17
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PLANSPONSOR - April/May 2021
Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2021
Ready Solution?
Tiptop Health Savings Accounts
2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
How TRO Might Benefit Plans
By Popular Demand
What's the ROI?
PLANSPONSOR - April/May 2021 - Cover1
PLANSPONSOR - April/May 2021 - Cover2
PLANSPONSOR - April/May 2021 - 1
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PLANSPONSOR - April/May 2021 - Ready Solution?
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PLANSPONSOR - April/May 2021 - 20
PLANSPONSOR - April/May 2021 - 21
PLANSPONSOR - April/May 2021 - Tiptop Health Savings Accounts
PLANSPONSOR - April/May 2021 - 23
PLANSPONSOR - April/May 2021 - 24
PLANSPONSOR - April/May 2021 - 25
PLANSPONSOR - April/May 2021 - 26
PLANSPONSOR - April/May 2021 - 27
PLANSPONSOR - April/May 2021 - 2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
PLANSPONSOR - April/May 2021 - 29
PLANSPONSOR - April/May 2021 - 30
PLANSPONSOR - April/May 2021 - 31
PLANSPONSOR - April/May 2021 - How TRO Might Benefit Plans
PLANSPONSOR - April/May 2021 - 33
PLANSPONSOR - April/May 2021 - By Popular Demand
PLANSPONSOR - April/May 2021 - 35
PLANSPONSOR - April/May 2021 - What's the ROI?
PLANSPONSOR - April/May 2021 - 37
PLANSPONSOR - April/May 2021 - 38
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PLANSPONSOR - April/May 2021 - Cover3
PLANSPONSOR - April/May 2021 - Cover4
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