Retirement Facts

Retirement Reality, The Facts #1

Welcome to the inaugural edition of “Retirement Reality, The Facts” brought to you Americans for Secure Retirement. Seventy-seven million Baby Boomers will be entering retirement over the next few years. The biggest financial risk these retirees face is not knowing knowing how long they will live and therefore, how long their resources will have to last.

70 million American workers lack access or do not participate in any employer-based retirement benefits. With Social Security covering only 38 percent of pre-retirement income, saving and planning for retirement falls entirely on these workers.

Anuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement.

Retirement Reality, The Facts #2

Three out of five middle-class new retirees can expect to outlive their financial assets if they attempt to maintain their pre-retirement standard of living, according to a 2008 Ernst & Young study.

Annuitization provides a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living. In fact, the same E&Y report found that retirees without a guaranteed source of income face a greatly reduced standard of living.

Retirement Reality, The Facts #3

Only 25.6 percent of Hispanics are covered by employer-sponsored retirement plans, compared to 42.5 percent of whites and 40 percent of African-Americans, leaving the saving and planning for retirement entirely to these workers.

Annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement.

Retirement Reality, The Facts #4

The average retired middle-income American will have to reduce their standard of living by 51 percent to avoid outliving their financial assets, according to a 2009 Ernst & Young study.

Annuitization provides a steady stream of guaranteed income in retirement, reducing the risks that these retirees will outlive their savings or face significant reductions to their standard of living.

Retirement Reality, The Facts #5

Women face unique challenges in having a financially secure retirement. Women are at a much higher risk than men of facing economic uncertainty and on average, enter retirement with considerably less savings. A typical 25-year-old woman with a college degree will make about $523,000 less in wages over her lifetime than a typical college-educated man. Women also work an average of 12 years less than men do over their lifetimes often due to family caregiving responsibilities. Fewer work years translates to fewer years saving or participating in an employment-based retirement program, meaning most saving and planning for retirement falls to these women.

In honor of Mother’s Day, we are collecting stories of challenges faced and overcome by the women of America in retirement. Tell us your story or the story of a woman you love. Later this month, we will host discussion on these stories and the role annuitization can play in providing a steady stream of guaranteed income in retirement.

Retirement Reality, The Facts #6

An annuity is a flexible financial product that allows you to accumulate retirement savings on a tax-deferred basis and then reap the benefits of your savings in the form of a lump sum payment or regular payments for a specified period of time (e.g., for five years, ten years) or the creation of “paycheck for life.” A steady stream of guaranteed income in retirement reduces the risks that retirees will outlive their savings or face significant reductions to their standard of living.

Retirement Reality, The Facts #7

According to a 2008 Ernst & Young study, a married couple nearing retirement without a defined benefit retirement plan had more than a nine-in-ten likelihood of outliving their financial assets. After the recent market declines, studies show this has increased to a 19-out-of-20 chance.

Annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that these retirees will outlive their savings or face significant reductions to their standard of living.

Retirement Reality, The Facts #8

Farmers face unique and difficult retirement challenges. Only 30 percent of the agricultural workers in the United States work for an employer that sponsors some form of retirement plan, either a traditional pension, or 401(k). This means that for a majority of farm workers, it is up to individuals to plan and save for retirement and then manage these savings so they provide an adequate standard of living for the rest of their lives.

Extreme variability in farm income due to fluctuations in commodity prices, weather, and macroeconomic policies, among other things also makes it difficult for farmers to plan and save for retirement effectively.

Annuitization can help agricultural workers better manage their savings to last a lifetime, providing a steady stream of guaranteed income in retirement and reducing the risks that they will outlive their savings or face significant reductions to their standard of living.

Retirement Reality, The Facts #9

In 2008 the Congressional Budget office reported that Americans lost over $2 trillion in accumulated retirement assets in their 401(k), pensions and other traditional retirement savings over the preceding 15 months.

As we recover from the “Great Depression,” annuitization can help Americans better manage their remaining savings to last a lifetime by providing a steady stream of guaranteed income in retirement.

Retirement Reality, The Facts #10

Polling reveals 78 percent of Americans are concerned about their retirement future and seven in ten feel they are not saving enough for retirement. Americans worry that what they hope to be a comfortable retirement is simply unattainable.*

It is imperative all Americans have access to guaranteed streams of retirement income that cannot be outlived. Avenues such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing peace of mind.

Retirement Reality, The Facts #11

According to the Department of Labor, only 43 percent of Americans have calculated how much they need to save for retirement, making the management of retirement assets over a 20+ year retirement difficult.

It is imperative all Americans have access to guaranteed sources of retirement income that cannot be outlived. Vehicles such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living, while providing peace of mind.

Retirement Reality, The Facts #12

According to an AARP survey, over a quarter (28%) of 45 + year old American workers were worried they were not on track regarding retirement savings before the economy slowed down, and nearly six in ten respondents (58%) think they are not saving enough for retirement.

It is imperative all Americans have access to guaranteed sources of retirement income that cannot be outlived. Retirement vehicles such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living, while providing peace of mind.

Retirement Reality, The Facts #13

Because of recent changes in the economy, during the past 12 months 20% of workers have actually stopped putting money into a 401(k), IRA, or other traditional retirement accounts.

Come retirement, these retirees will have to manage personal savings so they provide an adequate standard of living for the rest of their lives.

It is imperative all Americans have access to guaranteed sources of retirement income that cannot be outlived. Retirement vehicles such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living, while providing peace of mind.

Retirement Reality, The Facts #14

The median household with a person between the ages of 45 to 54 saw its net worth fall by more than 45 percent between 2004 and 2009.

It is imperative all Americans have access to guaranteed streams of retirement income that cannot be outlived. Avenues such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing peace of mind.

Retirement Reality, The Facts #15

Of the 61 million working women in the US between the ages of 21 and 64, only 46% participate in an employment retirement plan in any given year. This means that for a majority of working women, it is up to individuals to plan and save for retirement and then manage these savings so they provide an adequate standard of living for the rest of their lives.

Vehicles such as annuitization can help these women better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing peace of mind.

Retirement Reality, The Facts #16

A deferred annuity is a long-term vehicle, designed to accumulate assets over time. When a retiree is ready to receive income, usually at retirement, the accumulated savings are converted into a steady stream of guaranteed income for the chosen period of time.

Deferred annuities may be purchased with a lump sum or multiple contributions.

This is how annuitization help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement.

Retirement Reality, The Facts #17

WHAT IS AN IMMEDIATE ANNUITY?

Immediate annuities begin making payments right away or within a short time after purchase and are paid over a specific period of time. The payments may be monthly, quarterly or yearly — creating a paycheck for life.

An immediate annuity is usually purchased with a single lump sum contribution.

It is imperative all Americans have access to guaranteed streams of retirement income that cannot be outlived. Avenues such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing peace of mind.

Retirement Reality, The Facts #18

The vast majority of annuities are purchased by middle-class Americans: eight out of 10 individual annuity owners have annual household incomes below $100,000, according to a 2009 Gallup survey.

These Americans consider annuities to be a vital tool to successfully meet the retirement challenge – a method to accumulate retirement savings and turn those savings into a steady guaranteed retirement income stream that cannot be outlived.

Retirement Reality, The Facts #19

The traditional three-legged stool of retirement income on which previous generations of Americans have relied for financial security in retirement is broken. Nearly half of the American workforce does not have an employer based retirement plan. Social Security covers less than 40 percent of preretirement earnings and for much of the past decade the personal savings rate was negative.

Annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing deserved peace of mind.

Retirement Reality, The Facts #20

Less than 30 % of Americans feel confident about having enough money to pay for basic expenses during retirement. This is no surprise: As Americans live longer and the shift away from traditional pensions continues, growing numbers of retirees are facing the difficult challenge of managing their savings on their own and managing them so they provide an adequate and steady stream of income throughout retirement.It is imperative all Americans have access to guaranteed streams of retirement income that cannot be outlived. Retirement vehicles such as annuitization can help Americans better manage their savings to last a lifetime by providing a steady stream of guaranteed income in retirement, reducing the risks that retirees will outlive their savings or face significant reductions to their standard of living and providing peace of mind.

Thank you for following “Retirement Reality, The Facts” brought to you Americans for Secure Retirement and supporting our mission to ensure all Americans can achieve a financially secure retirement. Take a look back at all the facts on today’s retirement reality here. Visit our website anytime and we’ll be in touch soon!