Baby Boomers Prefer Saftey Over Risk

During Strong Market Performance, Transition Boomers Still Crave Guarantees

By Cathy DeWitt Dunn

New Allianz Life Survey Finds Boomers Ages 55-65 Prefer Protection over Returns, but only One Quarter Currently Own Annuities

Baby Boomers Crave Guarantees, Not RiskMINNEAPOLIS–(Business Wire)–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 North America (Allianz Life®).

Specifically, 87% of Transition Boomers surveyed reported being more attracted to a financial product with 4% return that is guaranteed not to lose value over one with 8% return but with the possibility of losing value due to market downturns. This feeling was higher among: women (91% versus 82% of men), those with under $50,000 in annual household income (92% versus 83% of those with more than $50,000 in annual household income), and those without children at home (87% versus 79% with children at home). Despite this attraction to guarantees, only 25% of respondents said they currently own an annuity, a product that can help answer the demand for guarantees.**

“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 Allianz Life President and CEO Walter White. “There are financial products that can deliver these benefits, but the industry needs to do more to educate these Transition Boomers about them.”

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%). However, “a withdrawal strategy that ensures I won’t outlive my income” (14%) was ranked with near equal importance to “an investment strategy to grow my assets” (15%) – a sign that a key retirement issue annuities can address is growing in significance.

“Transition Boomers are telling us that withdrawal strategies are as important to them as growing their assets, but the industry has only recently begun to focus on this important aspect of retirement,” noted White. “The 10 years of the Transition Period can be a time when boomers build in income floors as a foundation of a withdrawal strategy.”

Income for Life

The Transition Boomers surveyed cited attributes that best describe annuities, with the majority (60%) noting that annuities can provide the “possibility of guaranteed income for life” and nearly half (49%) 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% of Transition Boomer respondents reported a general lack of understanding, saying either “there’s a lot about annuities I’m not sure about” (37%) or “I haven’t got a clue” (38%).

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.

“Today’s annuities have advanced significantly in the past five years,” added White. “As concerns grow over rising healthcare costs, we’ve designed annuities that can help address inflation and offer a more stable retirement. The task ahead is to make sure Transition Boomers learn how these annuities can strengthen their retirement strategies.”

About Allianz Life

Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2013, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 142,000 employees worldwide. More than 78 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.

Allianz Life Insurance Company of North America offers insurance and annuities in all states except New York. In New York, products are issued by Allianz Life Insurance Company of New York.

*The Allianz Life 2013 Transition Boomers and Retirement Income survey was conducted by Ipsos U.S. eNation online from March 15-25, 2013 with 1,425 panel respondents age 55-65, and was commissioned by Allianz Life Insurance Company of North America.

**Annuity guarantees are backed by the financial strength of the issuing company.


Allianz Life Insurance Company of North America
Sara Thurin Rollin, 763-765-6703


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