Addressing Participant Longevity
Art by Tim Bower
More than half (53%) of Americans surveyed by AIG Life & Retirement said their goal is to reach age 100. However, this optimism for aging—fueled in part by medical advances and healthier lifestyles—is tempered by the financial challenges individuals may face in a retirement that could stretch 40 years or more.
Robert Scheinerman, president of AIG Retirement Services, formerly VALIC, says he was surprised by how many people want to live to 100. “It dispelled myths about old age and how vibrant people are for a longer time,” he says.
The survey was conducted as part of the launch of AIG’s “Plan for 100,” an initiative focused on educating and empowering individuals, employers and financial advisers to help Americans prepare for longer lives and, in turn, possible four-decade retirements. The initiative includes the launch of a new website, Planfor100.com, and podcast series that will raise awareness about the impact of increased longevity and educate Americans about potential solutions.
Scheinerman says staying healthy will help people allay health-care-expense concerns.
But, for sponsors and advisers, one way to assist workers who are aiming for this goal is to use smart plan design.Automatic enrollment and automatic escalation, for instance, can help them boost their savings. He suggests plan sponsors and advisers set a target for an ideal amount to save—e.g., 15%—but plan to get participants there over time, to minimize any pain. He also notes that stretching the employer match formula can encourage people to save more.
“Good educational tools, to explain the importance of saving and how to invest, as well as access to advisers, can make a big difference,” Scheinerman says. “Getting a professional to coach participants along the way is a good way to help them [connect] health and savings with their retirement expectations.”
As for Plan for 100 survey respondents’ expressed desire for guaranteed income, Scheinerman says, the first step is to ensure participants accumulate enough money. Legislators also have a role, he says. The Retirement Enhancement and Savings Act (RESA) can help make that first step possible.
Americans’ Biggest Fears About Living to 100
