Retirement Research
What does the research tell us about building retirement income?
Retirement planning involves more than accumulating assets. Here we examine research from leading academics,
institutions, and industry experts on retirement income, longevity, risk, and the decisions that can shape financial
outcomes throughout retirement.
RESEARCH HIGHLIGHT
Can Insurance Improve Retirement Income and Legacy Outcomes?
Ernst & Young | Benefits of Integrating Insurance Products into a Retirement Plan
What EY Studied
EY examined whether integrating permanent life insurance and deferred income annuities with a traditional investment portfolio could improve retirement outcomes compared with an investment only approach. The analysis considered investors beginning at different ages and evaluated strategies using Monte Carlo modeling across 1,000 economic scenarios. EY measured two primary outcomes: sustainable after tax retirement income and the legacy value ultimately available to heirs.
What EY Found
EY found that integrated strategies could improve retirement income, legacy value, or a combination of both under the assumptions modeled. For younger investors, the results generally supported allocating 10% to 30% of annual savings to permanent life insurance. Later, a portion of accumulated wealth could be allocated to a deferred income annuity to provide lifetime income. EY found that the appropriate mix depended on the investor's objective, with different allocations favoring retirement income, legacy value, or a balance of the two.
Why This Matters
Retirement planning is not simply about accumulating the largest possible investment portfolio. EY's analysis suggests that different financial tools can serve different purposes within a long term strategy. Investments can provide growth, permanent life insurance can provide protection and a source of financial flexibility, and an income annuity can help address the risk of outliving retirement assets.
Important Considerations
EY's findings are based on modeled assumptions and hypothetical scenarios. Actual results will vary based on age, health, product design, investment performance, interest rates, taxes, fees, and individual circumstances. The research does not establish a single strategy that is appropriate for every investor.
Original Research
Explore the complete EY study, including its methodology, assumptions, modeled strategies, and detailed findings.