Podcast Center
Video Center
Webcasts
Resource Center
Events
April 30, 2012 at 08:00 PM
The bear market of 2008-09 hit pre-retirees’ and retirees’ portfolios hard. Although the broad equity market indices have since recovered, older investors remain cautious about risk-taking, according to Prudential’s survey, “Changing Attitudes About Retirement Income: Tracking the Challenges of Investors in the Retirement Red Zone® (2006 to 2011).” The results highlight a post-bear market shift to more conservative attitudes among investors close to retirement or recently retired. Among the findings:
The majority of investors say they are more cautious now than ever before: 68%
47% hesitate to invest more in the market despite future growth opportunities.
In planning and managing their retirement assets, many show a more conservative mind- set—expecting their investment approach to be “bearish” over the next five years: 48% Close to a third don’t know what to expect: 30%
In 2006, investing too aggressively or too conservatively was seen as equally risky. Today, 60% believe being too aggressive is the greater risk.
In 2009, 68% believed this to be the case, revealing how significantly the volatility of the market impacts investor perceptions.
Stability is good
Older investors are also expressing a desire for more investment alternatives to stabilize or guarantee retirement income. “The survey shows increased awareness of guaranteed retirement income products, and strong interest in them,” says Kimberly Supersano, chief marketing officer, Prudential Annuities in an email response. “More than eight in 10 (82 percent) see them as a valuable addition to their portfolio; with more than half (52 percent) saying that having stable income in retirement is a leading concern.” The survey further reports that:
• Compared to 2006, investors are more aware of guaranteed retirement income products—specifically, products that can guarantee lifetime income from retirement savings (up 6 percentage points from 2006), or guarantee to lock in market gains (up 8 percentage points) or provide a minimum annual growth rate (an 11 percentage point gain) on money intended for use as lifetime income.
