Income is the New Outcome: The Collective State of Retirement Income After Three Decades of Research

This research brief examines the critical shift needed in retirement planning—from accumulating savings to generating guaranteed income throughout retirement. As 30.4 million baby boomers approach retirement with longer life expectancies and projected Social Security benefit cuts, the brief explores how workplace retirement plans must evolve to help workers navigate the complex transition from saving to spending.

Summary

Workplace retirement savings plans have succeeded in helping Americans save for retirement, but they fall short in helping workers plan for and manage income throughout their retirement years. Workers face significant financial risks including outliving their savings, market volatility, cognitive impairment, long-term care costs, and financial exploitation—challenges exacerbated by low longevity literacy and misconceptions about annuities. Recent legislative reforms like the SECURE Act and SECURE 2.0 have begun addressing these gaps by requiring guaranteed lifetime income illustrations and creating fiduciary safe harbors for in-plan annuities. The research calls for a holistic approach that reframes retirement planning from purely saving and investing to protecting savings and planning for guaranteed income through retirement.

Key Insights

• Only 12% of adults demonstrate strong longevity literacy, leaving most Americans unprepared to plan for the actual length of their retirement.
• Social Security benefits are projected to pay only 79% of scheduled benefits by 2033, increasing financial insecurity for future retirees.
• Over one-third of young adults incorrectly believe their workplace retirement plan provides guaranteed minimum income, revealing critical misconceptions about retirement plan features.
• Not purchasing an annuity ranks among the top financial regrets for 26% of retirees, yet misconceptions and lack of education prevent many from considering guaranteed income solutions.
• Reframing annuities as a consumption product rather than an investment makes individuals 2.5 times more likely to choose guaranteed lifetime income.
• 38% of employers say guaranteed lifetime income is most lacking in workplace plans.

Methodology

This research brief synthesizes three decades of academic research, legislative developments, and survey data on retirement income planning. The analysis draws from multiple sources including Social Security Administration reports, National Bureau of Economic Research studies, TIAA Institute surveys, and data from organizations such as the Center for Retirement Research at Boston College and the Society of Actuaries Research Institute. The brief examines trends in longevity, retirement behaviors, financial literacy, and attitudes toward retirement income products across demographic groups to provide comprehensive insights into the current state of retirement income security.