MINNEAPOLIS, Minnesota, July 9 -- Allianz Life, a provider of retirement solutions, including fixed and variable annuities and life insurance for individuals, issued the following news release:
Market volatility in the second quarter of 2019 has Americans increasingly worried about their finances and retirement savings, according to the latest Allianz Quarterly Market Perceptions Study. People are growing increasingly uncomfortable with market conditions, as only 31% say they are comfortable with market conditions and ready to invest, down from 33% in Q1, and 35% in 2018. In addition, more Americans say they fear a major recession (48% in Q2/46% in Q1/44% in 2018) or major market crash (47% in Q2/46% in Q1/42% in 2018) is coming.
The findings, released today by Allianz Life Insurance Company of North America (Allianz Life), show that Americans are starting to feel the pressure from major market swings over the past few months.
"Volatility has become the norm over the past year and a half, but that doesn't mean those major market swings are any less gut-wrenching," said Kelly LaVigne, vice president of Advanced Markets, Allianz Life. "The collective worry around an impending market crash or recession has been growing steadily since last summer, and people are starting to wonder when the other shoe will drop."
The volatility might also be making people shy away from investing funds, with fewer people saying that now is a good time to invest in the market (37% in Q2 compared with 41% in Q1). Interestingly, those with the longest runway toward retirement, millennials, were more likely to say they were too nervous to invest right now (36% compared with 34% of Gen Xers and 28% of baby boomers).
Desire for Protection
As a result of this ongoing volatility, interest in financial products that offer a balance of growth potential and protection is rising, with a third of people expressing interest in such a product, up from 27% last quarter. Further, 72% of people say it is important to have some retirement savings in a financial product that protects from loss, up from 68% last quarter.
Those with higher investable assets are more likely to say they would give up potential gains for a financial product that protects a portion of their retirement (71% of respondents with $200K+ in investable assets compared with 52% of respondent with less than $200K in investable assets).
"It's no surprise people want to move toward protection as they see market drops put a dent in their hard-earned savings," said LaVigne. "This is especially important for people getting ready to retire in the next five to 10 years who might not be able to rebuild their savings in time for retirement."
Baby boomers are increasingly worried about the effects of volatility on their retirement savings, with more baby boomers saying that volatility in the market is making them anxious about their nest egg (38% in Q2 compared with 32% in Q1).
"Those that are feeling worried about their retirement savings within the current financial forecast should meet with their financial professional to assess their risk exposure," said LaVigne. "Creating a strategy that addresses an ongoing volatile market is as important as ever."
About Allianz Life Insurance Company of North America
Allianz Life Insurance Company of North America, one of the FORTUNE 100 Best Companies to Work For(R) in 2019, has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2018, Allianz Life provided $2.8 billion in benefit payments that helped policyholders achieve their financial goals. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with over 142,000 employees in more than 80 countries. Allianz Life is a proud sponsor of Allianz Field in St. Paul, Minnesota, home of Major League Soccer's Minnesota United.