Americans’ retirement worries can’t catch a break.
More than 60% of retirement-age investors believe that low
interest rates, combined with rising inflation, will make it harder to create a
retirement income stream that will last their lifetimes, according to a new
study from New York-based life insurance and annuity company Global Atlantic
Financial Group.
Nearly a quarter of participants (24%) said they are
extremely or very concerned about the impact inflation will ultimately have on
their ability to live comfortably in retirement.
The survey focused on investors nearing or at retirement
(ages 55 to 70) with between $250,000 and $2 million in assets and no pension.
A whopping (96%) believe protected, guaranteed monthly income in retirement is
important, with more than a third saying it was extremely important). However,
less than a quarter currently use annuities (24%) or bonds (23%) to protect
their assets.
Most of the respondents cited a mix of stocks and mutual
funds (73%), and two-thirds (67%) cited cash equivalents as their ways to
protect assets, in contradiction to fears of a stock market correction (66%)
and continued inflation (57%) this year.
“External factors such as inflation, market volatility, and
interest rates are all valid reasons for people to be concerned about income as
they approach retirement,” said Paula Nelson, Head of Strategic Growth for
Individual Markets at Global Atlantic.
Among those surveyed, about two-thirds (68%) work with
financial professionals. And while nearly nine in ten (88%) of those advised by
financial professionals have discussed ways to minimize the risk in their
investment portfolio, just 28% say annuities were part of the conversation.
“The findings in the study reveal that retirees and those
approaching retirement are interested in the benefits of annuities but don’t
know enough to make an informed decision,” added Nelson.
Additional research found that annuity owners were actually
more confident about retirement security than non-owners. Three in five of
those with an annuity (62%) say the amount of money they have saved for
retirement will last the rest of their life, versus less than half (48%) of
those without an annuity. A full 40% of those without an annuity say they
“don’t know” if the money they have saved will last the rest of their lives.
Finally, half (48%) of annuity owners are extremely or very comfortable with
their investment asset and retirement protection strategy, compared to only
one-third (33%) of those without an annuity.
“This is an opportunity for financial professionals to learn
more about the many options available in the market and how they can help their
clients improve their overall retirement strategy,” said Nelson, noting that
advisors would benefit from “understanding the unique strategies annuities can
provide to improve their client’s ultimate outcome.”
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