Younger Baby Boomers are turning toward guaranteed retirement income rather than risk their financial futures on the stock market.
A new survey by Allianz Life Insurance Company of North America found that 87 percent of transition Boomers surveyed were more attracted to financial products with a guaranteed 4 percent return rather than a product with 8 percent return but a strong possibility of losing value due to market downturns.
Women, individuals with children or with household incomes under $50,000 felt the most strongly about the question. But despite this interest in guarantees, only 25 percent of those interviewed said they currently own an annuity.
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When asked what they believe to be their most important financial objective before retirement starts, 29 percent said they would like to increase their savings rate; 14 percent said they needed a withdrawal strategy that would ensure they didn't outlive their retirement income and 15 percent said they wanted an investment strategy to grow their assets.
"Transition Boomers are telling us that withdrawal strategies are as important to them as growing their assets, but the industry has only recently begun to focus on this important aspect of retirement," Allianz Life President and CEO Walter White said in a statement.
The survey found that people's knowledge about lifetime income products, like annuities, was low. Three-quarters of respondents admitted they didn't know much about annuities.
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