Despite recent good market returns, Americans are still scared of market volatility and opt for guaranteed payments in retirement, according to a new study by Allianz Life.
The Allianz Life 2014 Market Perceptions Study says 78 percent of those surveyed prefer guaranteed income over products with high growth potential but the possibility of loss. The survey included 791 adults who are not yet retired.
If they had extra cash, 80 percent of the respondents say they would not invest it in the market because of a fear of the market’s uncertainty.
“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,” says Allianz Life Vice President of Consumer Insights Katie Libbe. “It appears that the recent threat of volatility is enough to keep many consumers away, particularly those who are focused on saving for retirement.”
If they had extra cash, 39 percent say they would buy a product that offers some growth but also offers protection against a downside market, the survey says.
Nineteen percent say they would put extra money into a product with only modest growth and no potential loss and an equal number would put extra cash into a savings account.
Only 11 percent say they would put extra money into a product with high growth potential and no protection from loss.
“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,” adds Libbe.