A study from Global Atlantic Financial Group (Global Atlantic) revealed that three out of five retirement-age investors (61%) believe that low interest rates, combined with rising inflation, will make it harder to create a retirement income stream that will last their lifetimes. In addition, 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 of retirement-age investors (ages 55 to 70) with between $250,000 and $2 million in assets and no pension, also found that while nearly all (96%) believe protected, guaranteed monthly income in retirement is important (35% said it was extremely important), less than a quarter currently use annuities (24%) or bonds (23%) to protect their assets. Instead, most 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. “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. 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.”
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 study also revealed that annuity owners are 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.
“With this survey data in mind, financial professionals should consider adding annuities to their practice and would benefit from understanding the unique strategies annuities can provide to improve their client's ultimate outcome,” added Nelson.
Consumers can visit Global Atlantic’s website for additional resources on how to protect retirement savings from inflation, low-interest rates, bond value risk and market instability. Financial professionals can also visit Global Atlantic’s financial professional website to learn more.
About Global Atlantic
Global Atlantic Financial Group is a leader in the U.S. life insurance and annuity industry, serving the needs of individuals and institutions. With differentiated investment and risk management capabilities, deep client relationships, and a strong financial foundation, the company has established a track record of delivering proven, value-added solutions and long-term growth. Global Atlantic is a majority-owned subsidiary of KKR, a leading global investment firm that offers alternative asset management across multiple strategies and capital markets solutions. KKR’s parent company is KKR & Co. Inc. (NYSE: KKR). Global Atlantic Financial Group (Global Atlantic) is the marketing name for The Global Atlantic Financial Group LLC and its subsidiaries.
About the Survey Methodology:
The survey was conducted as an online quantitative study by Artemis Strategy Group among 1,023 investors with assets of $250k to $2 million. This size of sample allows for analysis and reporting of subgroups, such as by age, gender or those who are retired versus still employed. This sample represents a critical group in transition: a new generation that will retire without a pension. Global Atlantic estimates that there are about 7 million households (or 12 million people) in the U.S. who have between $250k and $1 million and do not have a pension.
Global Atlantic Financial Group (Global Atlantic) is the marketing name for The Global Atlantic Financial Group LLC and its subsidiaries, including Forethought Life Insurance Company and Accordia Life and Annuity Company. Each subsidiary is responsible for its own financial and contractual obligations. These subsidiaries are not authorized to do business in New York.