One might think that boomers who say their nest eggs are insufficient to provide for a comfortable retirement would heavily invest in stocks to catch up for lost time. But data released this month from the National Association of Variable Annuities, Reston, Va., reveals that a significant percentage of boomers find this approach too risky. According to the NAVA poll, 63% of Americans aged 50 to 59 said they are concerned about whether they will have enough money to maintain their desired lifestyle in retirement. Among all other age groups, 50% expressed such concerns.

Yet, when asked how much of their retirement assets they would invest in the stock market, 32% of boomers aged 50 to 59 bracket said they would not be comfortable investing anything. And 64% would not put more than 30% of their money into equities. Among younger boomers aged 40 to 49, the figures are 23% and 53%, respectively.

“The results reflect a failure to adapt,” says Mathew Greenwald, president and CEO of Greenwald & Associates, Washington, a market research company that conducted the study on behalf of NAVA. “Retirement can last a long time. If you don’t expose yourself to the market, then you’re stuck with at best very modest returns.”

Investing exclusively in conservative vehicles like certificates of deposit and bonds, he adds, may have made sense in years past when pre-retirees could have counted on more of a safety net. But given recent trends, including cutbacks in defined benefit plans, increasing health care costs, longer life spans and rising lifestyle expectations, exposure to the equities markets is essential.

Some advisors, however, take issue with the NAVA results. Eric Brotman, a financial planner and president of Brotman Financial Group, Timonium, Md., says most of his boomer clients favor an aggressive investment posture, particularly those who have fallen behind in their retirement planning. Distinguishing his clientele from the NAVA respondents, he suggests, are differences in education and outlook.

“The folks who seek my financial advice already are believers in the power of equity investing and asset management and want to have an advisor who will help them achieve their goals,” he says. “Most also have learned the basics about financial planning, either formally or through access to good financial information at their companies.”

Adds Penny Marlin, a financial planner and principal of Marlin Financial, Delray Beach, Fla.: “Among boomers who bother to go to a financial planner, I’m not finding as much hesitancy abut investing in equities. I’m seeing an already predisposed population.”

Advisors say skittishness about investing in stocks and mutual funds is more pronounced among retirees born during the Great Depression. Gregory Daniel, a financial planner at Daniel Financial Management Group, Hackensack, N.J., notes that from one-third to one-half of his clientele in this age bracket are “irrationally afraid” of stocks. These people either avoid the equities markets entirely or fail to invest sufficiently–even after seeing an illustration showing them running out of money unless they change course.

“Many retirees overvalue the short-term risk of stocks and undervalue the idea that they might live to age 90,” says Bruce Julien, a financial planner at Julien Financial who shares offices with Daniel. “And the older they are, the more afraid they are of stocks.”

How to overcome this fear? Greenwald suggests that risk-averse investors may be receptive to purchasing a variable annuity that provides, at additional cost, guarantees that protect principal against market volatility. The optional riders commonly offered include the guaranteed minimum accumulation benefit, the guaranteed minimum income benefit and the guaranteed minimum withdrawal benefit.

But Brotman cautions that variable annuities are no cure-all for the risk-averse investor. The reason, he points out, is that cash accumulations inside the products’ sub-accounts are tax-deferred and are, therefore, subject to ordinary income tax rates. Investors would be thus well advised, he says, to maintain some portion of their savings in taxable investments, such as mutual funds, which are subject to lower long-term capital gains rates.

“The old argument about putting everything into tax-deferred vehicles and paying ordinary income [tax] later works great if you’re planning to be poor, but not if you’re planning to be wealthy,” says Brotman. “It’s important for investors to have several types of assets. So when the times comes to start taking distributions, they can do so based on what is most advantageous for them at the time.”