Americans are not prepared to generate income for retirement, according to a new survey from GE Financial. Only 41% were familiar with the term "retirement income planning."
The survey polled more than 1,000 individuals of all ages about their understanding of retirement. Of the 59% who knew about retirement income planning, only a quarter were seeking advice from a professional.
Respondents gave remarkably scattered responses to the question, "If you plan to covert your savings to income, how will you do it?" No single vehicle or method stood out among responses, and 44% admitted that they didnt know.
As dramatic as some of these results are, they come as no surprise to Matt Sharpe, SVP of the retirement income channel at GE. "Its clear that consumers again have stated through survey results that they dont have a clear idea of what theyre going to do as it relates to retirement income planning. Theyre still focused on accumulation."
When asked about what financial products people are using to fund their retirement, the most common response, from 52% of investors, was 401(k)s plans. Mutual funds came in second at 38%, with IRAs a close third at 36% and stocks just behind at 34%. Less common were annuities, at 16%
As for which vehicle would constitute the largest source of retirement income, 29% of respondents cited 401(k)s, 16% stated company pension, and Social Security and mutual funds tied with 9% of responses. Stocks and annuities are expected to provide the bulk of retirement income for only 3% of respondents each.