Concerned Over Investment Protection, Retirees Look to Lifetime Income

Global Atlantic Financial Group found 70% of retirement age investors have spoken to financial professionals about conservative asset allocations
retirement income Global Atlantic
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Retirement age investors with assets between $250,000 to $1 million are still concerned over volatility, a potential recession, and high interest rates—so much so that they’re willing to consider lifetime income solutions, finds new research by Global Atlantic Financial Group.

According to the research, 64% of investors between the ages of 55 to 75 say shielding their assets from risk is more important to them than growing their investment, and 92% reported concerns over volatile markets, a recession, and rising interest rates.

The concerns are not unforeseen, finds Global Atlantic, as three in five (59%) experienced a dip in their portfolio values last year. Of those, nearly half of investors (48%) reported a dip of greater than 10%.

As a result, 70% of investors have spoken with their financial professionals about conservative asset allocations, and more specifically on adding a portion of their portfolio into products that protect and limit downside risk while still providing upside potential, reported the research.

“These survey findings illustrate that those facing retirement or in retirement greatly value financial strategies that may protect their income,” said Paula Nelson, head of strategic growth for Individual Markets at Global Atlantic, in a statement. “With emotions running high coming out of 2022, it’s important that financial professionals have discussions with their clients about asset protection, particularly as we continue to experience periods of uncertainty in the markets.”

Despite 89% of respondents reporting concerns over inflation, 54% said they are still optimistic over their 2023 investment performance, reported Global Atlantic. When it comes to financial priorities, respondents reported their top urgency as creating or utilizing a retirement income plan that can provide lifetime income. Currently, just half of investors surveyed believe they are protected from a market downturn.

“Nearly nine in 10 of those in our survey said protecting investments to limit downside risk is important, but only half actually believe they are positioned for that protection,” added Nelson. “This is a clear indication that investors and their advisors may need to re-examine allocations to make sure they have a source of stability included in their portfolios.”

The Global Atlantic findings come as new reports analyze the possible impact of lifetime income solutions. Research from The Bipartisan Policy Center (BPC) and BlackRock last week found that guaranteed lifetime income tools could potentially produce greater spending power while limiting downside risk—generating 29% more annual spending ability while reducing downside risk by 33%.

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Amanda Umpierrez
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.

1 comment
  1. The most popular qualified default investment alternative (QDIA) is extremely risky near retirement, contrary to participant preference for safety. Target date funds are allocated 85% to risky assets at their target date — 55% equities plus 30% risky long-term bonds .

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