Retirement worries span generations

Part of Invesco’s Saving for Life series

Andrew LasterAlthough generational differences run the gamut from music preferences to the digital divide, baby boomers, Generation X and millennials have this in common: concern about retirement security. According to a recent survey1:

  • 45% of boomers (born between 1946 and 1964) anticipate a lower standard of living in retirement.
  • 83% of Gen Xers (born between 1965 and 1979) feel that achieving financial security will be more difficult for them than it was for their parents.
  • Only 18% of millennials (born between 1980 and 1995) feel very confident about retirement.
  • 77% of all workers surveyed are concerned about the potential for diminishing Social Security benefits.

In addition, because only about half of workers in these three generations believe they’re saving enough for retirement, they anticipate working at least part time in retirement. More telling, 15% expect this will be their primary source of retirement income.

Let’s take a closer look at the overall retirement picture for each generational cohort.

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Annuities: Are you overlooking this retirement income source?

Part of Invesco’s Saving for Life series

Andrew LasterThree-quarters of Americans are worried about having enough money for retirement.1 That’s no surprise, as pensions are rapidly disappearing and Social Security is subject to political tinkering. What’s more surprising, in my view, is that many investors have overlooked annuities as a way to potentially fill the retirement income gap. It’s been estimated that less than 8% of retirees age 70 and older are getting income from a private annuity.2

What is an annuity?

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‘Annuity aversion’ may limit retirement income options

Part of Invesco Saving for Life series

Andrew LasterIn a hardware store, an experienced builder selects the right tools to get a job done most efficiently, while a novice, stumped by the vast array of choices, can easily buy the wrong tool for the job. What’s the difference between a builder and a novice? Quite simply, knowledge. The more you know about the tools of the trade, the better job you can do.

Likewise with investing. Here’s an example. Although annuities can deliver what many investors say they want, some people are unsure about using an annuity as a tool to build their retirement strategy. In other words, their “annuity aversion” may limit their options to achieve the retirement they want.

Enough income and financial independence

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Spoiler alert: Annuities decrease suspense about retirement income adequacy

Part of Invesco Saving for Life series

Andrew LasterIf you’re a fan of scary stories or mysteries, you’re probably comfortable sitting on the edge of your seat. But while suspense and surprise can make a great plot for a book or movie, you don’t want them in your retirement story line. Instead of thrills, you’re looking for confidence. So what you don’t want as a fan is exactly what you need in retirement — a spoiler. Because annuities offer guaranteed1 lifetime income, they can help “spoil” the suspense about whether your money will last your lifetime.

What twists and turns might await you in retirement?

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