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Gen X Investors Want to Hear About Annuities: Survey

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What You Need to Know

  • 65% of surveyed investors who were ages 65 to 75 were collecting pension benefits.
  • 52% of the surveyed investors in the 55-64 age category were in pension plans.
  • Only 55% of the Gen X investors are on track to have pension income.

Generation X members and young baby boomers with big nest eggs may be much more interested in hearing about annuities than older investors are, according to new survey data.

One problem: At this point, the number of Gen X investors with big nest eggs seems to be low.

The Alliance for Life Time (ALI) and Cannex have put data supporting those possibilities in a report, on an online survey of 1,519 U.S. residents ages 45 through 75, that was made available to ThinkAdvisor.

The Pew Research Center has defined “Generation X” as including people born from 1965 through 1980 — meaning people that have turned, or will turn, 41 through 56 this year.

Baby boomers are turning 57 to 75 this year, meaning that many have already retired.

The full ALI-Cannex survey report does not include a breakdown for members of Generation X and baby boomers, but it does break out some of the data by age group.

The survey team found that the participants in the Gen X and young boomer age groups were much more interested in hearing about annuities than the participants in the older age groups.

About 41% of all of the participants said they wanted to hear more about annuities, but there was a sharp divide between those 55-59 and those 60-64 years old.

Here’s how the percentage of participants who said they were at least moderately interested in buying an annuity for retirement income planning purposes varied by age group:

  • 45-49: 58%
  • 50-54: 57%
  • 55-59:  55%
  • 60-64: 37%
  • 65-69: 30%
  • 70-75: 19%

The Survey

An outside firm conducted the ALI-Cannex survey in April. All of the participants said they had at least $100,000 in investable assets.

A public summary of the survey report is available here.

Motives

The full ALI-Cannex survey report includes data giving an obvious reason for Gen Xers’ and young boomers’ interest in annuities: the younger investors with significant nest eggs are much less likely than older investors with nest eggs to be in defined benefit pension plans, or to have confidence in Social Security benefits.

Here’s a look at the percentage of survey participants who expect to get defined benefit pension income after retirement, either through their own plan or a spouse’s plan, broken down by age group:

  • 45-54: 55%
  • 55-64: 64%
  • 65-76: 74%

Similarly, a chart included in the full report shows that the participants ages 70-75 are now getting about 60% of their retirement income from Social Security and defined benefit pension plans.

The youngest participants expect to get only 40% of retirement income from Social Security and pension plans.

A Wrinkle

Only 22% of the survey participants were ages 45 through 54.

About 41% were ages 55 through 64, and 36% were ages 65 through 75.

The relatively small number of Gen Xers in the sample could be due to Gen Xers being less inclined to take surveys or due to the fact that many people build up their nest eggs after age 55, after buying houses and putting children through college.

But it’s also possible that the small number of Gen Xers sample is due to Gen Xers having trouble with accumulating retirement savings.

The Transamerica Center for Retirement Research has reported, for example, that the baby boomers it surveyed had median household retirement savings of $75,000 in 2007,  $127,000 in 2014 and $144,000 in 2019.

Gen Xers had $32,000 in 2007, $70,000 in 2014 and  only $64,000 in 2019.

(Photo: Adobe Stock)