DES MOINES, Iowa–(BUSINESS WIRE)–The Indexed Annuity Leadership Council (IALC) today announced the launch of a survey that examines the impact of the pandemic on trends in retirement. The study found that almost a third (30%) of American workers said the pandemic delayed their plans for retirement.
“The pandemic has impacted the way Americans are planning, saving, and living in retirement and created a financially insecure environment,” said Jim Poolman, executive director of the Indexed Annuity Leadership Council.
Eighty-six percent of Americans who plan to retire say guaranteeing their income in retirement is important, and 42% of survey respondents said the pandemic made them more risk-averse.
While this might indicate increased interest in products like fixed indexed annuities, or FIAs – which offer guaranteed lifetime income, market downside protection, and minimal risk in retirement – more than half of respondents (51%) said they’ve heard of a fixed indexed annuity.
“We’ll continue to see the financial impact of the pandemic play out over the coming decades,” said Poolman. The IALC survey sought to balance pandemic-related financial impacts, and compare how those effects shifted depending on how far out respondents were from retirement.
“The Great Recession shaped and continues to shape the financial literacy and behavior of Gen X and Millennials more than a decade later. The COVID-19 pandemic and resulting economic impact will have a similar lasting influence,” said Poolman. To illustrate, of those who report having never heard of FIAs, 23% are 18-34, 33% are 35-54, and 43% are 55+. “We may see this risk aversion among younger cohorts translate to financial behavior in the future.”
Other top retirement trends and findings from the IALC survey include:
- Two-fifths of Americans (40%) say their savings have increased since March 2020, whilst 17% say they have decreased. This correlates with income, as those in higher income brackets are more likely to say their savings have increased, which signifies widening financial inequalities.
- 37% of Americans said they have had to dip into savings to cover daily expenses since the pandemic began and 15% said they have had to dip into them a lot. This is more pronounced among younger Americans, rising to 59% among those aged 18-34, and less pronounced among older Americans, dropping to 20% among those 55 years of age or older.
- 54% of Americans would consider working part-time to supplement their retirement income. This rises to 69% among those considering retiring in the next five years and 73% among those planning to retire in five years or beyond.
The IALC survey was sent to a nationally representative sample of approximately 2,000 participants, and data was collected in April 2021. To view full findings, click here.
About the Indexed Annuity Leadership Council
The Indexed Annuity Leadership Council (IALC) brings together a consortium of life insurance companies with a commitment to providing consumers, the media, regulators and industry professionals complete and factual information about the use of indexed annuities. Namely, that these products provide a source of guaranteed income, principal protection, and interest rate stability in retirement as well as balance to any long-term financial plan.