Americans who are planning for their retirement with an employer-sponsored plan are open to adding annuities to shore up their post-work finances.
A new report from the newly launched Allianz Center for the Future of Retirement reveals that 60% of respondents said they were worried that they will not have sufficient funds from their plan to last through their retirement.
The most cited reason for their concern is the inflation risk to their employer-sponsored plan, followed by market downturns, major non-health-related expenses, and health and long-term care expenses. Previous Allianz Life research found that annuities can help retirees cope with anxieties brought about by inflation and rising costs of living.
“As employer-sponsored plans become increasingly central to retirement savings, understanding participant preferences is essential,” says Matt Gray, head of Employer Markets, Allianz Life Insurance Company of North America. “We’re seeing that Americans want retirement income strategies in those plans that can help their savings last for their lifetime. The driving concerns vary among plan participants who will seek out specific product features that can address the risks that matter most to them.”
The concerns are driving interest in annuities with 70% saying they would consider it if the option was available in their plan. But 30% are unsure that it would be the right fit for them and more than half (54%) would be willing to pay for advice to manage their contributions in line with their financial situation and retirement goals.
“Designing better experiences and enhancing retirement outcomes hinges on a deep understanding of retirement plan participant preferences,” says Meghan Farrell, Senior Manager, Defined Contribution Insights for the Allianz Center for the Future of Retirement. "By harnessing our research capabilities and the wealth of knowledge and experience at Allianz Life, the center strives to provide practical insights and drive innovative thinking to address key challenges facing retirement planning.”
Financial professionals are seeing sales of annuities rise and a recent report found that nearly three in four respondents who sell annuities said the products help them retain clients.
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