Landmark Study Finds Number of Protected Households Rises for First Time Since 2018

The Alliance for Lifetime Income’s annual Protected Lifetime Income Study reveals 3.1 million newly protected households and identifies five profiles of Americans planning for retirement

Washington, D.C., October 26, 2020 — For the first time since the Alliance for Lifetime Income launched the Protected Lifetime Income Study in 2018, the number of protected households in the US has increased. Protected households are those that have a source of protected income – a pension or an annuity – to supplement what they receive from Social Security. The share of protected US households grew from 37% in 2019 to 40% this year, representing approximately 3.1 million newly protected households. Additionally, the study determined that this year’s increase is attributable to annuity ownership.

The increase in protected households is notable given the current environment of uncertainty and volatility due to the pandemic, as well as economic and social challenges facing Americans. The study also finds that more than four-in-ten pre-retired Americans are more anxious now about their retirement savings, with the number one retirement question pre-retirees are asking themselves being: will my savings and investments be enough?

“No American should face the prospect of running out of money in retirement, and while this year’s study highlights measurable progress toward that goal, there is still much work to be done,” said Jean Statler, CEO of the Alliance for Lifetime Income. “Our research shows the pandemic and resulting market and economic conditions have triggered what we are calling a ‘retirement reset,’ forcing Americans to rethink their retirement plans and protect their retirement income.”

The data from the Alliance survey, which was conducted in August 2020, spotlights some of the progress and inherent tensions facing Americans thinking about, planning for and living in retirement. This Census-balanced survey of 3,036 US adults is also the foundation for a unique analysis that has identified the five profiles of Americans planning for retirement.

Americans increasingly look to annuities for protected income

The study shows that Americans are looking for financial protection, while also feeling optimistic about retirement. More than six-in-ten pre-retirees are optimistic about their financial preparation for retirement. That feeling of optimism is aided by an increasing sense of retirement security: 74% of retired Americans and 51% of pre-retirees think their income will last their lifetime, a three and nine percentage point increase from last year’s survey, respectively.

While this year’s study revealed a record number of protected households, it also highlights the fact that more progress is needed, as 60% of American households are still unprotected. Data from these major tracking surveys shows that protected income can lead to a dramatic increase in Americans’ retirement security, confidence and outlook, with 78% of protected Americans saying that they think their income will last their lifetime, compared to only 41% of those who are unprotected.

Another finding from this year’s study shows a continuing problem: three-in-four Americans still do not have a specific financial plan to follow and, among pre-retirees, only about one-third (35%) have calculated their monthly expenses and financial needs in retirement. The study also revealed that pre-retirees anticipate their employer-sponsored retirement savings and investments will generate more income for retirement than retirees typically report, on average, while retirees end up relying on Social Security more than pre-retirees expect to, on average.

“No American should face the prospect of running out of money in retirement, and while this year’s study highlights measurable progress toward that goal, there is still much work to be done.”


There are only three sources of protected lifetime income available today: Social Security, pensions and annuities. In fact, the first two are actually a type of annuity, just with a different name. The study found that six-in-ten pre-retirees (60%) think the benefits of annuities are very important, while more than half of pre-retirees who don’t currently own annuities are interested in including annuities as part of their retirement plan and three-in-five think they should have at least some portion of their retirement portfolio in annuities. Yet, 61% say they still don’t understand annuities well, illustrating the need for more consumer education.

Said Statler: “We’re breaking through in our efforts to educate Americans about the need to plan for retirement income because the volatile and uncertain times we’re living through have demonstrated that focusing solely on accumulating savings for retirement is not enough. Americans want the protected income and retirement security an annuity can provide, but many simply don’t know where to look. Our mission as a non-profit education program is to make that connection – annuities can provide protected income and retirement security.”

The survey results seem to parallel changes in the market following two straight years of increases in annuity sales, with annuity sales up 15% in 2018[i] and 3% in 2019,[ii] according to LIMRA sales data. While sales have declined this year, most likely due to the economic fallout and adjustments to a new normal related to the Covid-19 pandemic, growth in annuity sales the past two years seems to have helped increase the overall percentage of protected US households.

Groundbreaking profiles of Americans planning for retirement.

There are two persistent and fundamental disconnects in the American psyche about retirement. First, Americans are optimistic about retirement but lack confidence in their retirement income. And second, they have a desire for protected income but lack awareness and understanding of the products that provide it.

This is the first profile and segmentation of consumers planning for retirement that I’ve ever seen that really incorporates protected income in a meaningful way and should definitely help provide a behavioral and emotional roadmap to understanding and resolving the tension that exists in how Americans approach retirement.”


To help resolve these disconnects, the Alliance conducted a new analysis in this year’s study to better understand the emotional and behavioral patterns of Americans as they plan their financial futures. In doing so, the Alliance identified five unique profiles of Americans planning for retirement. These profiles do not rely on typical demographic information, such as age or investable assets, but rather on people’s dreams and hopes for retirement, the way they approach financial decisions and the actions they are taking today.

The five profiles and brief descriptions of consumers planning for retirement are:

  • Optimistic Dreamers: Creative and open-minded, these individuals want to do good for society and are hopeful that they will enjoy retirement but are uncertain of how to financially prepare for it.
  • Cautious Preparers: Individuals who adhere to tried-and-true practices in life, including when planning for a financially secure retirement, but are concerned about the risk of costly surprises.
  • Uncertain Strugglers: Individuals who aspire to gain control over the direction of their lives and expect to take things as they come in retirement to the extent that they don’t have a financial plan for it.
  • Purposeful Planners: Individuals who enjoy leading well-rounded lives and spend considerable time and energy to ensure that they can afford the same lifestyles in retirement.
  • Ambitious Risk-Takers: Optimistic in their outlook on life, these individuals want to achieve great things for both themselves and society and are confident in their ability to plan for a financially secure retirement.

“This is the first profile and segmentation of consumers planning for retirement that I’ve ever seen that really incorporates protected income in a meaningful way and should definitely help provide a behavioral and emotional roadmap to understanding and resolving the tension that exists in how Americans approach retirement,” said David Blanchett, head of retirement research for Morningstar Investment Management LLC, and senior education fellow with the Alliance for Lifetime Income. “It’s going to be an invaluable resource for financial professionals to better understand the different emotional, behavioral and decision-making styles of their clients, while at the same time helping Americans recognize their own styles, dreams and preferred path to financial and retirement planning.”

This year’s study underscores for many Americans the hopes and anxieties that often coexist when planning for retirement. It also shows a path for people to resolve those tensions and improve their retirement outlook by securing a source of protected income, like an annuity, to fill the income gap left by Social Security (The Social Security Administration estimates that Social Security replaces about 40% of pre-retirement income for middle-income earners and only about 27% for high earners)[iii].

About the study

The Alliance for Lifetime Income’s 2020 Protected Lifetime Income Study is the third study in an ongoing research program tracking the level of protected/unprotected households in the United States and providing valuable insights into consumers’ attitudes and behaviors around retirement-income planning.

This online study was conducted in August 2020 among a Census-balanced cross-section of 3,036 U.S. adults ages 25-74. Study results were weighted to correspond to the distribution of the U.S. adult population based on age, gender, income, race, education, ethnicity and region. The study was conducted by Artemis Strategy Group.

2020 Protected Lifetime Income Study Research Summary

About the Alliance for Lifetime Income

The Alliance for Lifetime Income is a non-profit 501(c)(6) educational organization based in Washington, D.C., that creates awareness and educates Americans about the value and importance of having protected lifetime income in retirement. Our vision is for a country where no American has to face the prospect of running out of money in retirement. The Alliance provides consumers and financial advisors with educational resources, interactive tools, and actionable research and insights to use in building retirement income strategies and plans. We believe focusing attention and conversations on retirement income that lasts throughout life leads to greater retirement security for millions of Americans. Learn more at

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