If you are concerned about your retirement nest egg, you are certainly not alone. A new survey shows that nine out of 10 baby boomers believe there is a retirement crisis and almost six out of 10 are worried they haven’t saved enough.
Among the more striking results: 61% of boomers say they are more afraid of outliving their money than they are of dying.
The second annual “Reclaiming the Future” survey by Allianz Life Insurance Co. shows the economic downturn of 2008-2009 took a big toll on boomers: 53% saw their net worth drop significantly, 43% lost value on their homes, and 41% realized they are not as in control of their financial future as they had thought they were.
More respondents this year than in past surveys said they would like to work with a financial advisor, and more expressed interest in products that guarantee income. In fact, 69% said they prefer a product that is “guaranteed not to lose value” rather than a product whose goal is “providing a high return.”
In addition, 56% prefer an annuity-like product (moderate growth opportunity, guaranteed monthly income for life, but limited access) to a product that risks running out of money while providing access to potentially higher returns.
This year’s survey polled 439 people between the ages of 44 and 75 in March, at about the time the Dow Jones Industrial Average hit a two-year high. Despite the ongoing economic recovery, most respondents remain pessimistic about investment returns. In fact, the average respondent now expects to retire at age 66.5, up from age 63 just a year earlier.
Indeed, there are several factors today that make all of these concerns valid. Pensions provided by employers are rapidly becoming a thing of the past, replaced by 401(k) and other retirement plans that require research and planning by account holders. The growing dependence on such plans also makes retirement savers more vulnerable to market downturns such as the 2008 crisis. Meanwhile, life expectancy is increasing, stretching the number of years that your retirement income needs to last.
More than half the respondents said the economic crisis has made them realize that a secure retirement is by no means guaranteed, and 46% said protecting their assets has become more important to them. Nearly a third said they want to achieve a higher level of security regarding their retirement years.
Do you share these worries? Has the economic crisis caused you to rethink your prospects for a financially secure retirement? We’re here to address your concerns and help you create a solid retirement plan for you and your family. Call us to begin discussing your future today.