How to Quit Working and Keep Getting Paid – Securing a Paycheck Throughout Retirement

  How to Quit Working and Keep Getting Paid – Securing a Paycheck Throughout
  Retirement

State Street Global Advisors’ Study Finds a Shift in Mindset as Participants
Move from Retirement Saving to Spending

Business Wire

BOSTON -- July 31, 2013

The next wave of expected retirees want help planning a secure stream of
income in retirement, according to a recent survey of US retirement plan
participants released today by State Street Global Advisors (SSgA), the asset
management business of State Street Corporation (NYSE:STT). SSgA’s Biannual
Defined Contribution Investor Survey, “Young at Heart: What DC participants
are thinking about retirement income,” highlights the needs, behaviors and
concerns of plan participants and recent retirees about their retirement
income and weighs the tradeoffs they are willing to make with their
accumulated savings.

The study finds that a significant majority of participants (80%) believe a
guaranteed monthly payout benefit is a “must have,” even if it means
compromising some access to their retirement savings. Other findings include:

  *55% see generating a stable income as a top priority versus generating
    returns (27%), or preservation of capital (25%);
  *69% believe that some sort of guaranteed monthly income stream will be
    necessary in addition to Social Security; and
  *64% of respondents plan to take monthly withdrawals to cover their
    expenses while only 6 percent prefer a lump sum payout from their plans;
  *While a majority of plan participants are satisfied with the quality of
    support they receive from their plan, there remains an opportunity for
    plan sponsors to help participants establish guaranteed income during
    retirement

“Participants are looking forward to life in retirement, and they want to be
able to enjoy their golden years without financial stress,” said Fredrik
Axsater, managing director and head of global Defined Contribution for SSgA.
“They need guidance on what do with the savings they have accumulated - how to
spend it and how to make it last.”

Retirees’ lack of confidence as they approach retirement is shaping their
decisions about transitioning to decumulation. Only 24% are confident that
they’ve saved enough to retire comfortably and nearly half (46%) aren’t
planning on retiring until after age 66, with 15 percent expecting to hold out
until after age 70. In the run-up to retirement, catching up on savings takes
a back seat to generating returns and preserving capital. As they near
retirement, however, most (55%) shift their focus to generating a stable
income in retirement. The opportunity is ripe for plan sponsors to not only be
retirement savings providers, but retirement income partners.

The new issue of SSgA’s The Participant magazine that features the survey is
also supplemented by a series of interviews with senior decision-makers at
some of the largest defined contribution (DC) plans in the industry. The
interviews focus on the trade-offs that plan sponsors make when seeking better
income products and how they might structure income solutions to match
participants’ needs. Both plan sponsors and participants agree that there is a
need for an in-plan DC retirement income product offering that features high
income replacement through a regular monthly payment. To make this income
stable enough to last a lifetime, participants and plan sponsors affirm a
willingness to sacrifice some liquidity.

“As workers shift from saving for retirement to spending in retirement, they
are evaluating their investment choices and looking to plan sponsors to help
them make that transition, Plan sponsors should seize this opportunity to
begin a dialogue with participants about how to achieve retirement security,”
said Axsater.

To view the complete results from SSgA’s Biannual DC Investor Survey or to
subscribe to The Participant magazine, please visit:
www.ssga.com/dc/theparticipant.

* SSgA’s DC Investor Survey, conducted jointly with TRC Market Research,
surveyed nearly 1,500 employees, aged 40 to 70, who participate in 401(k),
403(b), 457 and profit sharing plans.

About State Street Global Advisors

State Street Global Advisors (SSgA) is a global leader in asset management.
The firm is relied on by sophisticated investors worldwide for its disciplined
investment process, powerful global investment platform and access to every
major asset class, capitalization range and style. SSgA is the asset
management business of State Street Corporation, one of the world’s leading
providers of financial services to institutional investors.

CORP-0800

Contact:

State Street Corporation
Anne McNally, +1 617-664-8576
www.ssga.com