U.S. workers may find that variable annuities with guarantees are good vehicles for fine-tuning exposure to investment risk right before and after they retire.
Executives from the annuities arm of Prudential Financial Inc., Newark, N.J., talked here at a press conference about workers’ need for help with balancing the need for performance during the years around retirement with the need for safety.
The executives presented the results of a recent survey that included 1,038 U.S. members of employer-sponsored defined contribution retirement plans.
The survey focused on workers’ attitudes about what Prudential is calling the “Retirement Red Zone,” or the period 5 years before and 5 years after retirement, when low inflation-adjusted returns or run-of-the-mill market losses can have a big effect on total retirement plan portfolio balances.
Although 61% of the survey participants said they were aware of investment products that could guarantee income for a spouse after a retiree’s death, only 54% knew about products that could guarantee lifetime income or a minimum annual return, and only 37% knew about products that could protect investors’ principal.