How Retirees Manage Retirement Savings for Retirement Income
Data Summary
How Retirees Manage Retirement Savings for Retirement Income
A Survey of TIAA-CREF Participants
Paul J. Yakoboski, Ph.D. Senior Economist TIAA-CREF Institute October 2015
About the survey
Savings to Income Survey--retiree data
? This research examines how retirees with significant assets in tax-qualified retirement accounts convert their savings to income during retirement and the factors that influence their decisions. In particular, the research examines the similarities and differences between those who annuitize any of their savings and those who do not.
? 1,000 retirees with these characteristics were surveyed: ? Age 60 or older ? Retired with at least $400,000 in defined contribution and/or IRA assets ? No defined benefit pension income ? 500 receiving annuitized payments (annuitants) ? 500 not receiving annuitized payments (non-annuitants)
2
Annuitant and non-annuitant demographics
Current age
60%
61%
Years retired
40%
47% 40% 42%
20%
30%
9% 2% 0%
4% 5%
Annuitants
Non-annuitants
60-74 75-84 85 or older DNA
30% 20% 10%
30% 29% 23% 18%
31% 31% 26%
13%
0% Annuitants
2-4 years 10-15 years
Non-annuitants
5-9 years over 15 years
Non-annuitants tend to be younger than annuitants, and they tend to have retired more recently.
3
Non-annuitants Annuitants
At retirement
When you retired, how confident were you that you could afford to retire?
26% 32%
52% 46%
20% 2% 20% 3%
There was no difference in retirement confidence among annuitants and nonannuitants at the time of retirement.
0%
20%
40%
Extremely confident
Somewhat confident
60%
80%
100%
Very confident
Not too/not at all confident
4
In retirement
How did your standard of living change with retirement?
80%
60%
61%
74%
How has your lifestyle in retirement compared with your expectations?
80%
78%
60%
64%
40%
20% 0%
28% 11%
Annuitants
18% 8%
Non-annuitants
Increased Did not change Decreased
40% 20%
0%
31%
5% Annuitants Exceeded Met
19% 2%
Non-annuitants Fallen short
Annuitants are more likely to have experienced an increased standard of living in retirement and a retirement lifestyle that has exceeded expectations. A possible explanation is that annuitized payments are greater than had been expected.
5
In retirement
How confident are you that you (and your spouse) will...
Extremely
Very
Somewhat Not too/not at
confident confident confident all confident
...be able to maintain a comfortable standard of living throughout retirement?
Annuitants
19%
54%
26%
2%
Non-annuitants
22
52
23
2
...not outlive your savings and financial assets?
Annuitants
22
49
25
3
Non-annuitants
21
47
27
4
...have the best strategy to manage and draw income from your retirement savings during retirement?
Annuitants
16
48
32
4
Non-annuitants
14
45
34
6
There are no notable differences in retirement confidence between annuitants and nonannuitants. One might expect annuitants to be extremely confident that they will not outlive their savings and assets; they may not view their annuitized income stream as a "financial asset."
6
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