Fifty-four percent of surveyed investors are concerned that increasing life spans will result in them outliving their savings, according to Blackrock’s “Investor Pulse” survey released today.
Sixty-two percent of investors polled said they are concerned about having enough income from investments to live comfortably in retirement, according to the survey.
"Increased longevity is a blessing, but it’s an expensive one because that translates into the need for a bigger retirement nest egg and access to secure, retirement-long income,” says Rob Kapito, BlackRock president.
Seventy-three percent of respondents agreed with the statement, "keeping my money safe is more important to me than trying to generate returns," according to the survey.
Investors have relied on traditional investments, such as Treasury bond funds that have delivered annual returns of up to 8 percent, for the past 30 years, stated Frank Porcelli, managing director and head of BlackRock's U.S. wealth advisory business. However, if interest rates rise or inflation picks up, investors could lose money. "The fact is that trying to play it safe with traditional government bond funds is actually much more risky than many investors realize," Porcelli says.
Many respondents recognize the need to look beyond traditional bond funds for income and about 60 percent say they need to improve the diversification of their income-generating investments, according to the survey. Yet only about 20 percent of those surveyed said identifying better income-generating investments will be a major focus for them over the next year.
Also, investors are reluctant to consider opportunities in new asset classes and to look beyond the U.S., according to BlackRock.
The survey found that 62 percent of respondents said that investing outside of the U.S. is too risky. And just 46 percent indicated that they are thinking about increasing their focus on dividend-paying equities.
Many investors are uncertain about including stocks in their investment mix, according to BlackRock. Over half agreed with the statement, "I am concerned that, so far this year, the stock market has gone up too far, too fast" and said they “can’t handle the markets ups and downs.”
"What investors need to do today is not dismiss any asset class, but instead maintain a highly flexible approach that enables their investments to move freely to wherever the opportunities exist—in stocks, bonds and beyond—around the globe," said Porcelli.
The BlackRock poll of 451 investors with investable assets of $50,000 or more was conducted April 12-14 by GfK.