Type of retirement benefits will often determine timing of retirement.

We all have our own hopes, dreams, and wishes for retirement. For some of us, that means retiring the first chance we get, and for others it means putting it off for as long as possible.

But if the latest research is right, the timing of our retirement may not be up to us. In fact, some studies indicate that the date of our retirement may have less to do with our age, and more to do with the type of retirement benefits being offered in our workplace. This point becomes abundantly clear when comparing participants in 401(k) plans and defined benefit (traditional) pensions.

Other research suggests the gap may be even larger.

Whether large or small, if you are the one who has a potential gap, you may want to explore ways to close it with a stream of guaranteed retirement income. But let’s look at some more data first.

Why do people with 401(k)s retire later than people with pensions? While there are many potential causes, most of them can be boiled down to a single word: uncertainty.

Will the money we save last the rest of our lives?

While traditional pensions promise retirees a fixed monthly benefit for the rest of their lives, 401(k)s and other defined contribution plans offer no such guarantees. Since the money we set aside in a 401(k) may have to last well into our 80s or 90s, it comes as no surprise that workers with these plans are delaying retirement in order to build the largest possible nest egg.

How much do we really need?

With a 401(k), the burden of saving for retirement shifts from the employer to the employee. But how much money do we actually need? While financial experts routinely toss around figures that range between $1 million or $2 million, the amount we need to save depends greatly on the lifestyle we hope to lead. Since there are a host of variables to consider, New York Life has created a retirement and living expenses calculator to help determine if our current savings and assets will be enough to secure the kind of retirement we want.

What can we do to feel more secure about the future?

As comprehensive as our calculator may be, it can’t account for longevity, market downturns, and many other potential risks to our retirement savings. Fortunately, there are ways for those of us without pensions to enjoy a similar level of protection. For example: A Guaranteed Lifetime Income Annuity will, much like a pension, provide a steady stream of income that's guaranteed to last for the rest of our lives—no matter how long we live.1 And, if we choose an annuity that offers a fixed return, we won’t have to worry about the impact a decline in the market will have on our payments.

Let’s find the answers together.

To learn more about Guaranteed Lifetime Income Annuities, or some of the other ways that New York Life can help make sure that retirement is on our terms, please let us know. As always, we're here to help.

This article is for informational purposes only. Neither New York Life nor its agents provide tax, legal, or accounting advice. Please consult your tax, legal, or accounting professional before taking any action.

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