Severely shaken by the financial crisis and ongoing volatile equity markets, Americans are thinking less about a dream retirement and more about meeting basic needs. They especially are asking how to have a guaranteed income stream for retirement.

That's according to senior retirement executives at The Hartford, which held a recent press briefing in New York. "Retirement is no longer that luxury car, that trip to Europe. It's about going back to basics," said Jim Davie, executive vice president and director of the Investments and Retirement Division at Hartford Life, a subsidiary of The Hartford Financial Services Group Inc.

Jamie Ohl, senior vice president and director of The Hartford's Retirement Plans Group for Hartford Life, said people who have taken the time to plan their retirement are in a better place financially, and more optimistic and confident about the future than those who haven't.  

Unfortunately, many people haven't taken the time to quantify their basic living expenses in retirement and how to afford them, and only now are beginning to look for new opportunities to solve these problems in the wake of the financial crisis, said John Diehl, a certified financial planner and senior vice president with Hartford's Investment and Products Division.  

He said a portion of assets for retirement should be invested in growth investments and blended with an income component. Investors and financial advisors "should think about it less in terms of asset accumulation and more in terms of an income component" when seeking new retirement approaches, Diehl said.

The idea is to place a portion of clients' assets in a fixed guaranteed component to allow a better idea of your needs while accumulating assets for retirement, Diehl said. And this points up a greater need to seek out a financial planner, he said.

The Hartford, a major provider of retirement products, has plans for small, mid-sized and large companies; educational institutions; and public utilities. Altogether, the company has 30,000 retirement plans on its books, and 1.6 million participants.

An example of the firm's two-pronged approach to retirement today is its "personal retirement manager," a variable annuity product that combines an investment component emphasizing growth through low-cost tax deferred investing with a guaranteed retirement income component.  

"The product allows for an efficient accumulation of products on the accumulation side, while enabling investors to generate a lifetime income using the tool's payout annuity structure," said Philip Michalowski, director of annuity product development in the Investment Products Division.

"Putting them together in one package enables investors to build a customized retirement solution to fit their needs," he said.

"From a product development perspective," Michalowski said, "it's important to understand the needs driven by the demographics of your consumer in order to provide solutions that will help folks with their retirement income planning. There is a need for guaranteed income solutions to become part of a consumer's portfolio for retirement planning, and we're trying to fulfill that need." The annuity product is distributed through third-party intermediary relationships, he noted.  

Ohl pointed out the 401(k) plan's key role in retirement planning and said her firm is working closely with both plan sponsors and employers, encouraging them to step up investor education and get more employees to contribute to their plans. Though contributions have fallen previously, they are beginning to rise "as people see a greater need for more money for retirement," she said.

As evidence, she noted that 66% of U.S.-based assets for retirement today are lodged in such plans, an amount second only to Australia.
"Though we've gone through difficult times," she said, "it's important to educate people not to stop investing." More than 50% of plan sponsors currently provide investment advice, she noted.

In response to a question about how to get younger employees to contribute, Ohl said a key tool is the automatic enrollment feature, by virtue of the Pension Protection Act. "We are seeing employers helping younger employees by starting auto enrollment at higher rates, 4%-5%, and leveraging auto deferral increases up to 12-15%," she said.

Joseph F. Coughlin, founder and director of the Massachusetts Institute of Technology AgeLab, discussed some lessons learned from the financial crisis. Since people are living longer today and under greater duress, retirement should be defined more in terms of longevity and should start even before the teenage years, Coughlin believes.

"We should think about longevity as part of the education process from grade school and up," since the fastest growing portion of the population today is people 85 and older, Coughlin said.

Bruce W. Fraser is a financial writer and author based in New York City and a frequent contributor to Financial Advisor magazine. He can be reached at [email protected]. Visit him at