With the long-term decline in traditional pensions, most affluent investors recognize the importance of structuring their portfolios to provide a guaranteed income stream for retirement, but more than half (52%) have not done so, according to Spectrem Perspective.
The report, “Growing Need for Income Producing Investments: Facing Retirement Pro-actively,” examines the disconnect between the desire to put a retirement income stream in place and the reality that this is not happening. Of those who say they have such an income stream, 43% cannot identify the type of investment at its source. Those who can, respond: stocks (9%), annuities (12%), real estate (3%), and other (33%).
“The well-established decline of traditional pension plans correctly suggests to many affluent individuals a need to structure their portfolios to produce a guaranteed income stream for retirement. This can come from investments, such as stocks, bonds and CDs, annuity products or real estate that produces rental income. However, more than half of this group has not taken action. This is cause for concern. With 39% of the affluent not covered by defined benefit pensions, this will leave many open to the vagaries of the market and an uncertain financial future in their retirement years,” said George H. Walper, Jr., president of Spectrem Group.
The lack of income-stream preparation is surprising given that 68% of non-retired affluent households say establishing a guaranteed future income stream is an important goal.