Election season is thankfully headed for its final stretch, and calmer markets are giving Americans a chance to breathe and reassess.
Specifically, fewer people express concern over a coming recession than they did last quarter (57% compared with 65%), though the number is still higher than it was for all of 2019, new research from Allianz Life shows.
While immediate panic seems to have died down, people are still feeling the various health, social and economic effects of the pandemic and learning how these risks are affecting their financial situation.
According to the study, over one-third of Americans do not feel financially prepared to ride out the economic impacts of COVID-19, and more than half say the pandemic is having a negative impact on their retirement plans.
“After the initial shock of the health crisis and related market downturn earlier this year, Americans seem to be coming to terms with all the ways the pandemic is impacting their lives,” Kelly LaVigne, vice president of Consumer Insights with Allianz Life, said in a statement. “Now may be a good time for people to review their finances, including how to protect retirement assets from whatever the market may do as we head toward the election and the end of the year.”
As such, over half of all Americans (52%) say they regret not having more of their savings protected from market loss.
This may be leading to an increased interest in financial protection products, like annuities. The study found 64% of people say it’s important to have some retirement savings in a financial product that protects from market loss.
Are annuities an answer?
At the same time, the number of people who say they are willing to give up some potential gains in exchange for a product that protects a portion of their retirement savings from loss has been steadily increasing since the start of the year.
More specifically, nearly a quarter of people express interest in putting some money into a financial product with modest potential growth (2% to 3%) and no potential loss, the highest percentage in a year.
“This trend toward protection makes sense when you look at the economic and market environments since the beginning of the year,” LaVigne concluded. “When you also consider that no one is sure when the current economic and health crisis will end and the added uncertainty caused by the upcoming election, it’s logical that people want to mitigate some of that risk to their retirement savings, and add products that can help provide a level of protection.”