A new survey by the Alliance for Lifetime Income (ALI) finds that 70% of older working Americans with at least $100,000 in assets are more pessimistic about their retirement plans because of the COVID-19 pandemic. One-in-five of these workers, or approximately 3.2 million Americans, now plans to retire later than they had anticipated. ALI notes that the number would likely be much higher had the survey also included older workers with less than $100,000 in assets.
Only one-third of the respondents said that they are very confident they will have enough income to cover retirement expenses. In light of this growing uncertainty, nearly 25% of the respondents said they are considering financial products that provide guaranteed lifetime income, an increase of 36% from a previous ALI study in April. Some 86% of those surveyed knew that annuities provide monthly income that can help cover basic expenses during retirement.
The new ALI report is the third in a series of COVID-19 Retirement Reset tracking studies.
NAIFA is working with the Insured Retirement Institute to promote IRI’s Five-Point Plan to help retirement savers recover from COVID-19. Among the five points, the plan calls for legislation to remove barriers and allow retirement savers greater use of lifetime income products. The other points in the plan would increase the age for retirement plan required minimum distributions to 75, permit catch-up retirement plan contributions for people impacted by COVID-19, expand retirement planning options for employees of non-profit organizations, and improve tax-credit incentives to encourage small businesses to join multiple employer plans or pension equity plans.
NAIFA is actively urging Congress to implement IRI’s five point in the upcoming Phase 4 COVID-19 relief legislation.