Boomers prize financial certainty over all else
For baby boomers, financial security is the new black.
Despite the stock market’s rebound over the last two years, financially shell-shocked boomers prize low-yielding but stable investments over those with better profit potential but more risk.
That finding, in a new study by Allianz Life Insurance Company of North America, underscores the still-palpable fear gripping investors two years after the bear market ended.
Anxiety is especially high among boomers, the formerly risk-loving generation that couldn’t get enough of dot-com stocks a decade ago and McMansions a few years after that. No more. Now they want a sure thing even if the returns are muted.
Asked in the survey to choose between a financial product with a guaranteed 4% yield versus one that could earn 8% but might lose value in a bad market, 76% favored the no-risk option. The survey was done in March before the stock market’s recent jitters.
“Despite a significant rebound in the equity markets since the financial crisis, this new study confirms that a ‘new normal’ mind-set has dug deep roots in the minds of boomers,” said Gary C. Bhojwani, Allianz Life president and chief executive.
With the uncertain economy squeezing their investment portfolios and job prospects, boomers are growing anxious about their retirement.
Financially speaking, 35% of people said they feel “totally unprepared” for retirement, according to the study. One in two people said they are extremely concerned that they may outlive their retirement savings.
So what’s their retirement strategy? Work longer. On average, boomers expect to retire at age 66.5, a full 3.5 years later than when the same question was asked in a survey 12 months earlier.
-- Walter Hamilton