The bull market hasn't steadied shaken nerves.
As investors prepare for retirement, more are craving instruments that guarantee income over higher-growth, more volatile options, according to Allianz Life's 2014 Market Perceptions Study.
The vast majority of those surveyed (78 percent) said they prefer the predictability of products that generate foreseeable income streams, like annuities or bonds, to options like stocks that could make them more money.
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Given the option of an 8 percent return with exposure to market downturns against a 4 percent return and a guarantee of principal, respondents overwhelmingly chose the safer option.
Underscoring their squeamishness, four in 10 said "fear of market uncertainty" would prevent them from investing extra cash into their retirement, more than said they'd be deterred by a lack of reliable financial advice (26 percent) or today's low interest rates (22 percent).
"Hands down, Americans are saying their retirement savings strategy must include products and choices that offer guarantees, even though equity markets have performed well this year," said Katie, Libbe, Allianz Life VP of Consumer Insights.
Perhaps more worrisome is the evidence suggesting recent volatility is keeping many retirement savers from investing extra cash in markets.
Nearly one-in-five said they would put extra cash in a savings account, where it would earn little if any interest.
Another one-in-five said they would only take on modest risk with extra cash, trading a 2 to 3 percent return for a protection from loss.
And 12 percent said they would hold cash and wait for a market correction for investing it towards retirement.
Only 11 percent said they would put cash into a product with high-growth, and risk, potential.
Pre-retirees' greatest concerns are not being able to cover basic living expenses and outliving their savings.
Those fears are clearly driving interest in more predictable solutions that protect against volatility, according to Libbe.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
