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Want a longer, happier life?

Behavioral science explains how retirement income delivers retirement happiness.

Read time: 2 minutes

In all the ways people search for happiness, there’s one most probably haven’t considered: fixed annuities.

But more and more research demonstrates the benefits of annuities aren’t limited to lifetime income. Just knowing that perpetual paycheck will last their lifetime brings retirees a level of happiness in retirement others don’t get.

Ongoing research covering thousands of older Americans shows retirees are happier, healthier and more satisfied when they have guaranteed monthly paychecks to cover basic needs. What the science tells us:

1. You’ll be happier. According to a Rand Corporation study, people who have been retired 10 years or more and have annuitized income are 43% more likely to consider themselves “very satisfied” than those without.1 They’re also 39% less likely to report four or more symptoms of depression. These findings held true even when controlling for wealth.

2. You’ll live better. When basic needs are taken care of, it’s easier to splurge on the things you love. In fact, among retirees with comparable household wealth, those with guaranteed lifetime income spend twice as much as those who don’t have annuitized income, according to The American College of Financial Services.2

3. You’ll be healthier. Less worried about outliving their savings and less concerned about market volatility, annuity holders are less prone to stress, depression and other mood disorders known to affect physical health. According to a 2018 article in the Journal of Financial Services Professionals, a 65-year-old American male with a life annuity can expect to live about 20% longer than a 65-year-old male without.3

Several TIAA participants backed up the science. They told us they don’t suffer as much from stress or depression, and don’t worry when the markets do something crazy. 

Bottom line: In-plan annuities make for happier employees

But the happiness dividend isn’t limited to just employees. Employers stand to gain when they offer annuities in their retirement plans. How so? 

The data tells the story: Employers offering annuities in their retirement plans just might get happier, healthier and more loyal employees.

Learn more about the research and science behind happier retirements in the full article found hereOpens pdf. Or watch our next webinarOpens in a new window.

77% of employees want employers to offer annuities in 401(k) or 403(b) plans4

Alliance for Lifetime Income, June 2023

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1 Panis, Constantijn (Stan), “Annuities and Retirement Satisfaction,” RAND Corporation, 2003. 

2 Blanchett, David and Finke, Michael S., “Guaranteed Income: A License to Spend,” June 28, 2021. 

3 Tricker, Patrick, “Annuities and moral hazard: Can longevity insurance increase longevity?” Journal of Financial Service Professionals, July 2018. 

4 “Protected Retirement Income and Planning (PRIP) Consumer Report,” Alliance for Lifetime Income, June 2023.

Testimonials have been provided by current clients, and no direct or indirect compensation was given in return. No material conflicts of interest exist on the part of the individual(s) giving the testimonial, resulting from their relationship with the adviser. Results experienced by individuals may not be representative of the experience of other clients, and there is no guarantee of future performance or success.

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

TIAA Institute is a division of Teachers Insurance and Annuity Association of America (TIAA), New York, NY.

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