PLANSPONSOR - September 2017 - 6

Survey Says
Annuities
And Lifetime
Retirement
Income
C
oncerns about ensuring lifetime
retirement income for employees
have increased substantially
over the years. We asked NewsDash readers,
" Do you own an annuity, and do you
think individuals can have retirement
income that lasts through retirement
without one? "
Few (7.7%) of our respondents indicated
that they own an annuity within
their employer-sponsored retirement plan,
while 15.4% own one outside of their
employer's plan, and the majority (76.9%)
do not own one.
Asked if they think individuals can
have retirement income that lasts through
retirement without owning an annuity,
more than one-quarter (26.9%) said yes,
while 11.5% said no, and 61.5% said it
depends on their retirement savings situation.
Among those respondents who left
verbatim comments, the majority seemed
to be pro-annuity, while a few offered
insights for making retirement income
last without owning an annuity.
As always, all verbatim responses
reflect the opinions of individual readers
and not the stance of PLANSPONSOR
and its affiliates at Strategic Insight. The
majority (79.2%) of responding readers
work in a plan sponsor role; 16.7% are
third-party administrators (TPAs), recordkeepers
or investment managers; and
4.2% are advisers/consultants.
" It should be easy to just have a decent
60%/40%-split portfolio and take 4% withdrawals
on it. "
" Annuities have too high fees built in. A
retiree would be better off paying an adviser
to develop a withdrawal plan. "
" I believe it is possible for individuals
to have retirement income that lasts without
owning an annuity, but it requires investment
in assets that provide a continued revenue
stream during retirement. My father did this,
and he and my mom traveled, gave generously
to their church, and we had money for
medical care in the final days of their lives,
with most of their cash retirement savings still
in their investment accounts. "
" When I win the lottery, I will get an
annuity. That's the only time I can afford to
have my money tied up. "
" My employer has a frozen DB [defined
benefit] cash balance plan, and I will take
that benefit in an annuity. I think you need
both an annuity to protect against living
too long and equity investments as a hedge
against inflation. "
" An immediate annuity is the only
6 PLANSPONSOR.com September 2017
Art by Haejin Park
annuity type that anyone should purchase;
however, it does not adjust annually for inflation
... hence, the annuitant's buying power is
devalued as the cost-of-living index goes up. "
" While an annuity is 100% guaranteed
to provide income that lasts a lifetime, there
are also some great spending-down strategies
that will work. You may have a surplus at the
end of your life and realize you could have
spent more. But that's not such a bad thing. "
" With fewer traditional pension plans,
it seems logical there would be more interest
in annuities, but there is a lot of misunderstanding
[as well as] anti-annuity sound
bytes that scare people away before they
even understand the concept that they can
purchase a lifetime income stream. "
And the Editor's Choice goes to the
reader who said: " Defined benefit plans are
unequalled for providing lifetime income with
maximum efficiency. " -Rebecca Moore
You can participate by subscribing to
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PLANSPONSOR - September 2017

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