Even though workers in their 20s have decades of investing ahead of them, they want guaranteed income when it comes to their 401(k) plans.
Ninety-five percent of workers under 30 who don’t have access to a guaranteed income option at work said that they would like to have access to one as part of their 401(k) plan, according to a poll by The Hartford Financial Services Group Inc.
That desire diminished somewhat as the individuals surveyed increased in age, as only 77 percent of people over 60 wanted guaranteed income through their workplace retirement plans.
The large numbers of young people seeking lifetime income seems to be tied to their attitudes toward Social Security and their belief that it won’t be around by the time they are ready to retire.
“This [lifetime income option] is only part of a whole diversification strategy; it’s not something you look at without weighing all the other options in a plan’s offering,” said Patricia Harris, assistant vice president of product management for The Hartford’s retirement plans group. “The amount of risk an employee should take in his or her retirement plan depends on the person, and you need good tools to look at different investment mixes over time,” she added.
Though young workers are extremely interested in guaranteed lifetime income plans, they should still make sure to diversify their investments. These workers have time on their side and ought to take advantage of some market risk to up their returns in the long run.
More information: //www.workforce.com/article/20120514/NEWS01/120519987#