Consumers’ Top Focus:Guaranteed Income in Retirement and a Level of Protection
This opinion aligns with their current attitude about retirement strategies, where four of five respondents (80%) agreed that it’s important to have a guaranteed source of income in retirement, well ahead of those who indicated they are comfortable with current market conditions and ready to invest now (28%). When asked what factors would prevent them from investing for their retirement today if they had extra cash available, four in 10 respondents said “fear of market uncertainty,” ahead of “lack of reliable financial advice/guidance” (26%) and “today’s low interest rates” (22%).
“Hands down, Americans are saying their retirement savings strategy must include products and choices that offer guarantees, even though equity markets have performed well this year,” said Allianz Life Vice President of Consumer Insights
Extra Cash – What Would You Do?
When asked what they would be most likely to do if they had extra cash today to purchase a financial product for their retirement,
- 39% said they would put extra cash into a product that offers a balance of potential growth and some level of protection (up to 10% growth, a level of protection if the market goes down more than 10%).
- 19% said they would put extra cash into a product with modest potential growth (2-3% growth) and no potential loss.
- 19% said they would put extra cash into a savings account earning little or no interest.
- 12% said they would hold their extra cash and wait for the market to correct before purchasing a financial product for their retirement.
- 11% said they would put extra cash into a product with high growth potential and no protection from loss.
Seeking Guarantees When Transitioning to Retirement
In fact, when asked about the most important action to take 5-10 years before the start of retirement to help ensure a more protected retirement, more respondents (41%) said putting some of their money into a financial product that provides a guaranteed stream of income in retirement. Only 12% of respondents said the best strategy is to put some of their money into equities to build up retirement assets.
As previously noted, when given the choice between two financial products – one offering 8% return with the possibility of losing value/vulnerable to market downturns and one with a 4% return but guaranteed not to lose value – 78% of respondents chose the guaranteed product.
Concern: Enough to Cover Basic Living Expenses
What are their biggest concerns surrounding retirement? “Not being able to cover my basic living expenses,” (34%) and “outliving my income” (20%) were the top responses. Other issues that respondents noted they were afraid of in retirement include “paying for healthcare costs,” (17%), “seeing retirement savings drop significantly in value,” (12%), “keeping up with inflation,” (12%) and “managing any tax increases,” (4%).
“Concerns about covering basic expenses and outliving money in retirement are clearly driving more interest in solutions that can address these topics while still protecting against market losses,” added Libbe.
About Allianz Life
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*The Allianz Life 2014 Market Perceptions Study was conducted by Ipsos via their online iSay/Ampario Panel from
Allianz Life Insurance Company of
Source: Allianz Life Insurance Company of