Give me reliability and flexibility

Our 2022 retirement income study focused on plan sponsor and participant preferences for turning defined contribution (DC) savings into retirement income. We teamed with leading research firm Greenwald Research on an extensive study involving connecting with 100 plan sponsors and consultants and more than 1,000 participants (all working for large US organizations with at least 5,000 employees) through online surveys, in-depth interviews, and virtual focus groups­.

Plan participants wanted the ability to choose among a range of retirement income solutions to give them a feeling of control over their financial future. They wanted in-plan options that would provide the reliability of steady income and the flexibility to make changes as needed. At the same time, having too much choice could overwhelm them.

Participants who wanted more than one choice felt that the income solutions offered should be based on a monthly income amount to pay baseline expenses or flexible withdrawals to cover any ad-hoc expenses. However, no matter how many choices were available, 81% of participants said they would need assistance picking the best retirement income solution(s) to help achieve their retirement goals.

Plan sponsors can assist participants by offering both a guaranteed lifetime income solution for reliability and a non-guaranteed monthly income withdrawal solution for flexibility. Also, sponsors can highlight the resources and tools available to help participants determine the optimal combination of solutions for their retirement goals and what percentage to allocate to each solution.