7 Top Research Findings Show Americans Want to Protect Their Retirement

Younger investors are turning to annuities at higher rates. Here’s why.

The Alliance for Lifetime Income and CANNEX’s inaugural Protected Retirement Income and Planning (PRIP) Study recently found that investors are increasingly eager and interested in strengthening their retirement savings plan through annuities.

With Peak 65 in sight, many investors, especially younger ones, are interested in annuities as a concrete source of protected lifetime income to help supplement Social Security income. The long-tail effects of the pandemic, a challenging fixed-income environment, and historically low savings rates are all converging as retirement looms.

That realization has left many investors scrambling for solutions.
“The pandemic triggered a retirement reset in people’s minds, leading to this incredible demand today for the benefits of protected income solutions,” said Jean Statler, CEO of the Alliance for Lifetime Income.

Annuities can help protect investors against market risk and guarantee monthly income for as long as they live.

Here are seven top takeaways from the new PRIP study:

  1. Nearly all investors show interest in annuities. More than 90% of investors believe protecting retirement income is important. Those with pensions decline considerably by age, resulting in an even stronger need and desire for protection among younger investors.
  2. Gen X has a strong desire for annuities. A vast majority of investors ages 45-54 (71%) have some interest in purchasing an annuity as part of their overall retirement income plan and 22% are extremely interested.
  3. Gen X is more financially vulnerable for retirement than older populations. Pension ownership stands at 65% for investors ages 65-75 and drops with each younger generation. The most significant is among investors ages 55-64 at 52%followed by 48% for and ages 45-54. The study is also determined a critical need for annuities and retirement income education. A large portion of investors (29%) admitted they do not know enough about annuities to be able to identify the benefits.
  4. Younger investors see annuities as a replacement for pensions. More than half of investors under age 55 (58%) embrace annuities as an alternative to pension plans
  5. A majority of investors with an employer-sponsored retirement plan show interest in annuities. More than half of investors (56%) who have an employer-sponsored retirement savings plan— such as 401(k) and Roth 401(k) plans—are at least moderately interested in investing in an annuity through that plan.
  6. Investors who are protected by an annuity and/or a pension are more confident in their ability to enjoy their retirement years. A whopping 92% of investors who are protected by an annuity, or a pension, feel confident about covering expenses in retirement (versus 79% of the respondents who are not protected.
  7. Investors who have an annuity are more satisfied with their financial professional. A striking majority (84%) of investors with an annuity are very satisfied with their financial advisor versus those who do not have an annuity (74%).

For more on the PRIP survey’s recent findings, and information on how to manage your retirement funds later in life, watch the Your Money Map conversation with Jean Chatzky and Steve Vernon, a consulting research scholar at the Stanford Center on Longevity, on the Alliance for Lifetime Income Facebook page.

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