Despite the market's recent strength, Transition Boomers, those ages 55 to 65 closing in on retirement, resoundingly said they would protect their retirement savings with a guaranteed return rather than chancing a loss in the market, according to the 2013 Transition Boomers and Retirement Income survey from Allianz Life Insurance Company of
According to release, specifically, 87 percent of Transition Boomers surveyed reported being more attracted to a financial product with 4 percent return that is guaranteed not to lose value over one with 8 percent return but with the possibility of losing value due to market downturns. This feeling was higher among: women (91 percent versus 82 percent of men), those with under
"Our survey was taken when record stock market performance was generating daily headlines, showing that, regardless of how hot the markets are, Transition Boomers still crave protection for their retirement savings," said
When asked what they believe to be their most important remaining financial objective before retirement starts, "increasing my savings rate" was the top response among Transition Boomer respondents (29 percent). However, "a withdrawal strategy that ensures I won't outlive my income" (14 percent) was ranked with near equal importance to "an investment strategy to grow my assets" (15 percent) – a sign that a key retirement issue annuities can address is growing in significance.
The company stated that the Transition Boomers surveyed cited attributes that best describe annuities, with the majority (60 percent) noting that annuities can provide the "possibility of guaranteed income for life" and nearly half (49 percent) identifying that some annuities can offer "predictable growth of retirement assets." Yet, overall knowledge about annuities is still low. When asked which statement best describes their knowledge of annuities, 75 percent of Transition Boomer respondents reported a general lack of understanding, saying either "there's a lot about annuities I'm not sure about" (37 percent) or "I haven't got a clue" (38 percent).
One encouraging result is in respondents' opinions about the most desirable features of an annuity. Forty-seven percent of respondents indicated they found the "opportunity for increasing income during retirement to help keep pace with inflation" as desirable. Recent innovations with annuities and income benefits that may be added as a rider for an additional fee offer this kind of opportunity to help keep up with inflation.
Allianz Life Insurance Company of
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