A report shows many Americans don't know how to turn their 401(k) - among other investment vehicles - into steady income, potentially complicating matters in retirement, especially for those who don't have life insurance.
J.P. Morgan surveyed 1,000 Americans with 401(k) plans nationwide, finding that while 86 percent of Americans acknowledge they'll need to find a source of income once they stop working, 22 percent are unclear just how much in retirement income they can expect to earn. Only 40 percent said they were comfortable when it came to retirement income, possibly because some had already arranged for post-work income solutions, such as whole life insurance equipped with a fixed annuity.
The report also showed Americans drastically underestimated how much income they would need post-retirement.
"On the positive side, some 91 percent of participants agreed that they were personally responsible for their own financial futures," said Diane Gallagher, a J.P. Morgan executive. "However, there's still a significant gap between acknowledging responsibility and acting upon it."
Term life insurance can be important even for seniors, since many might have spouses or dependents who would need a source of income after they pass away.