A recent poll by the National Institute on Retirement Security (NIRS) finds that despite the improvements to the economy, Americans are still feeling anxious about their retirement prospects. Indeed, a majority (55%) are “very concerned” about the current economic conditions affecting their ability to achieve a secure retirement. One of the factors contributing to this anxiety is the volatility of the stock market. For example, three-in-four (75%) Americans agree that changes in the stock market make it impossible for the average American to predict how much money they will have in their nest egg when they retire. And, nearly two-third (63%) of Americans say that living longer is a major factor in making it harder for them to prepare for retirement, suggesting that Americans have genuine anxiety about the possibility of outliving their income in retirement.
Unfortunately, Americans have good reason to be concerned. A recent report by the Center for Retirement Research suggests that, for the first time, a majority of Americans are headed towards a retirement in which they will be financially worse off than their parents.
But it doesn’t have to be all doom and gloom. As is noted in a recent issue brief by the Heritage Foundation, there are products already on the market, such as annuities that offer those saving for retirement with a source of guaranteed lifetime income. More specifically, products like fixed indexed annuities can help savers add some balance to their financial plans—particularly in risky markets—by providing protection when the markets are down and potential for additional interest when the markets are up, guaranteed interest, and guaranteed income for life.