LIMRA Secure Retirement Institute analysis predicts that in the next ten years 66 million Americans will transition into retirement. That means by 2025, the number of retirees in the U.S. will have increased 40 percent.
As this enormous group begins to shift their assets toward living in retirement, more than $25 trillion in financial assets will be designated for retirement income, double the amount available today.
To better understand this market and its opportunities, the Secure Retirement Institute has compiled its best research on the subject into The Retirement Income Reference Book 2015. This comprehensive reference covers the many facets of planning and managing retirement income.
Jafor Iqbal, assistant vice president for the Institute authored the reference book and discussed key findings and trends in a new LIMRA podcast.
Based on the research, Iqbal identified three significant opportunities for the industry and advisors in the retirement income market:
Guaranteed lifetime income solutions: More than 40 percent of pre-retirees are interested in converting some of their assets into a lifetime income stream. The market for converting pre-retiree assets into future guaranteed income is estimated to be $575 billion. Current retirees who seek guaranteed income represent another $180 billion, for a total market potential of $750 billion.
Rollover market: The rollover market is estimated to be $455 billion in 2015, and will grow to $550 billion by 2018. For 1 in 4 retirees, a discussion of retirement income with an advisor before they retire is a strong motivator to roll out money. Going forward, however, proposed Department of Labor (DOL) regulations could have a significant impact on these rollover discussions and this market's potential.
Retirement Income Planning: Retirement comes with risks. Secure Retirement Institute research consistently shows consumers are concerned about having enough money in their retirement. More than 4 in 10 pre-retirees are not confident about their retirement security. Worries about cuts to Social Security and health -care cost, as well as, inflation are among their chief concerns. Retirement income planning can effectively address these insecurities. Pre-retirees who work with an advisor are almost twice as likely to have completed retirement planning activities such as, estimating how long their assets will last, determined the health care coverage they’ll need and set a specific plan to generate income in retirement. Those who have a plan also feel more confident in their retirement security, trust their advisors more, and consolidate assets with their advisors.
The Retirement Income Reference Book 2015 provides industry executives and professionals with a comprehensive view of LIMRA Secure Retirement Institute's latest data, market projections and research on the retirement income market.