"The Case for Lifetime Income" study from Prudential Financial and the Global Aging Institute offers policymaker guidelines to strengthen retirement systems.

Lifetime-income pooling can make retirement systems more efficient.
Report suggests countries could potentially deliver the same retirement security at ~20% lower cost when benefits are paid as lifetime income rather than lump sums.

Today, during the Spring IMF World Bank Meetings, Prudential Financial, Inc. ((PRU) unveiled new global research conducted by the Global Aging Institute (GAI) showing that while retirement savings have grown in many countries, most systems still leave individuals on their own to manage the risk of outspending or outliving their savings. The study concludes that lifetime income can significantly strengthen retirement security, helping people spend more confidently while reducing the overall cost and strain on retirement systems.

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The Case for Lifetime Income research highlights the essential role of lifetime income in enhancing retirement security for individuals and society. The industry collectively needs to make it easier for retirees to turn appropriate portions of their savings into an income stream that lasts their lifetime.

"Retirement security is one of the most defining issues of our time and solving for it will require collaboration across employers, financial institutions, and policymakers," said Phil Waldeck, head of U.S. Businesses at Prudential Financial. "For Prudential, our role in addressing this new era of longevity is helping individuals, financial advisors and workplace plan sponsors move beyond just account balances and savings to meet today's critical income planning and decumulation needs of aging populations."

GAI studied economic trends in Australia, Japan, the Netherlands, the United Kingdom, and the United States, showing the evolving retirement systems. While retirement savings are trending upward among defined contribution-style systems, following the shift from defined benefit to defined contribution plans, many systems still rely on purely voluntary withdrawal or income strategies that, by their nature, contain fundamental risks of inaction.

"Our analysis shows that when countries fail to make adequate provision for lifetime income, it greatly reduces the efficiency and increases the cost of their retirement systems while needlessly leaving individuals at risk of outliving their savings," said Richard Jackson, co-author of the study and the president and founder of the Global Aging Institute.

The report provides a set of policy guidelines that would protect lifetime income by normalizing or defaulting to longevity pooling, while preserving flexibility and helping manage market volatility, inflation, or interest-rate concerns. While there are not "one-size-fits-all" lifetime income and retirement security solutions, the study offers broad policymaker guidelines, which, among others include:

Lifetime income should, at a minimum, be made the default option in all employer pension systems or workplace retirement plans.

To minimize costs, standardize products and increase the scale of annuity purchasing pools by centralizing delivery of lifetime income, potentially using exchanges to connect employers with providers.

State pensions, in combination with other tiers of the retirement system, should consider adopting a universal recommended replacement rate of 75 percent, a sensible target for average-earning workers.

The collective industry needs to continue to innovate and offer flexible solutions, such as access to financial advice, as well as mechanisms to help manage inflation, interest rate, and other risks to protect against volatility, allow higher returns and provide exposure to inflation-sensitive assets.

Translate account balances into equivalent lifetime income payments when communicating with participants during the accumulation phase and guarantee them access to an appropriately qualified and objective advisor as they approach retirement.

To plan for the decumulation phase, participants should be guaranteed adequate financial advice with a qualified and objective advisor to build holistic financial plans for retirement.

Among the countries studied, four of the five countries¹ have large, funded retirement savings systems and share a pressing need to ensure that these systems provide adequate lifetime income.

To read the full report and learn more about its findings, please visit the Prudential Newsroom.

ABOUT THE GLOBAL AGING INSTITUTE

The Global Aging Institute (GAI) is a nonprofit research and educational organization dedicated to improving our understanding of global aging, to informing policymakers and the public about the economic, social, and geopolitical challenges it poses, and to encouraging timely and constructive policy responses. GAI's agenda is broad, encompassing everything from retirement security to national security, and its horizons are global, extending to aging societies worldwide. GAI was founded in 2014 and is headquartered in Alexandria, Virginia. GAI's Board of Directors is chaired by Thomas S. Terry, who is CEO of the Terry Group, past president of the International Actuarial Association, and past president of the American Academy of Actuaries. To learn more about the Global Aging Institute, please visit its website at www.GlobalAgingInstitute.org.

ABOUT PRUDENTIAL

Prudential Financial, Inc. ((PRU), a global financial services leader and premier active global investment manager with approximately $1.6 trillion in assets under management as of Dec. 31, 2025, has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees help make lives better and create financial opportunity for more people by expanding access to investing, insurance, and retirement security. Prudential's iconic Rock symbol has stood for strength, stability, expertise, and innovation for more than 150 years. For more information, please visit news.prudential.com.

To access the advice of financial professionals, visit here to find a local financial professional in your area.

Prudential is not affiliated with the Global Aging Institute.

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¹ The exception is Japan, which has a relatively small funded retirement system but needs to greatly expand it in coming decades.

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MEDIA CONTACT:

Claire Currie

claire.currie@prudential.com

New Research Points to Lifetime Income as the Missing Link to Global Retirement Security