Pandemic Has More Americans Thinking About a Retirement Reset

Since COVID-19 and the subsequent market volatility, 7 out of 10 Americans are now pessimistic about their retirement plans and some are turning to lower-risk options for their retirement investments, according to Alliance for Lifetime Income surveys conducted in April and June.

The Alliance’s online Retirement Reset Tracker surveys of Americans between 56 and 75 years old show that people have reset how they think about retirement, including when, how and where to retire. In particular, 1 in 4 pre-retirees are looking to reduce risk in their investments to protect their retirement.

For financial professionals helping their clients navigate during this volatile time, the message is even clearer: Your clients might be more interested than you think in securing their retirement income with an annuity. According to the latest CANNEX-Greenwald Guaranteed Lifetime Income Study, the percentage of consumers who are highly interested in annuities or already own one is three times the percentage of financial professionals who believe their average client is highly interested in annuities. The time is now to reach out to clients because almost 6 in 10 pre-retirees are reconsidering some aspect of their retirement plan.

Protected Income Is a Vital Source of Client Security and Comfort

The Alliance surveys indicate that the COVID-19 crisis, recent stock market turbulence and future unpredictability are causing a potential long-term shift in risk tolerance. Those still in the workforce — including those who have been recently laid off or furloughed — are more likely than retirees to shift toward lower-risk options; 29% of workers expect to lower their risk tolerance, while 19% of retirees said the same.

Meanwhile, among those who aren’t concerned about the current market environment, 48% say having protected lifetime income in the form of a pension or annuity is one of the reasons they aren’t worried. The No. 1 reason is having a diverse  portfolio that can weather this kind of volatility. 

For millions of Americans across generations, annuities have been a sound solution for clients because they:

  • Provide predictable monthly income that is protected no matter what the market is doing.
  • Help reduce the risk that they will outlive their money since payments can continue throughout retirement.

Chris Hernandez, a financial planner at Strategic Capital in Austin, Texas, says he hasn’t been getting calls from clients asking to get out of the market, and he attributes at least some of this confidence to his use of annuities that protect their principal. During the Great Recession in 2008, “the people I met who already owned annuities weren’t as concerned with the downturn, unlike those who didn’t have annuities,” he says.

People are mainly concerned about having enough income to cover expenses in retirement. In the Alliance surveys, 31% said they’re less confident they’ll have enough income for retirement after experiencing the Great Recession in 2008 as well as the downturn this year, and 20% of pre-retirees now expect to retire later than they originally planned to make up for recent investment losses. Only one-third are very confident they’ll have enough income to cover expenses in retirement. Having a pension or annuity is an important reason people remain confident they’ll have enough income to cover those basic expenses.


The great retirement reset is here, and people are looking for ways to protect their retirement income. This is the perfect time for financial professionals to help their clients develop a truly diversified retirement “income” plan, one that includes annuities to protect part of their portfolio. Their retirement security may depend on it.

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The post Pandemic Has More Americans Thinking About a Retirement Reset appeared first on InvestmentNews.

As our second lead editor, Cindy Hamilton covers health, fitness and other wellness topics. She is also instrumental in making sure the content on the site is clear and accurate for our readers. Cindy received a BA and an MA from NYU.

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