More than half of the US population thinks the coronavirus will mess up their retirement security, according to a new survey by Allianz Life.
At the same time, there’s a growing preference toward secure assets that help de-risk their portfolios.
The study centered on the recent market volatility caused by the COVID-19 pandemic, and queried Americans on their opinions of the influence that the turbulence could have on their retirement prospects.
“There was definitely angst about market swings before COVID-19, but the economic impacts of the pandemic are having a devastating effect on retirement saving,” said Kelly LaVigne, vice president of Consumer Insights, Allianz Life.
The firm found that citizens are reworking their retirement plans to cater to the new financial parameters they’ve found themselves in, with an emphasis on portfolio security and de-correlation with general market downturns. About 58% of Americans declared the pandemic will ultimately have a negative impact on their retirement savings, and that’s causing some changes in how they will approach their portfolio allocation leading up to the day they say goodbye to the workforce.
About seven out of 10 individuals in the Allianz study remarked they are putting more effort into portfolio protection plans and strategies to better help them weather any sort of anomalies in market behavior or turbulence in public equities.
“After the end of the bull run and subsequent major market drops, many people are shifting priorities and looking at protection products,” Allianz said in a statement.
The number of individuals who agree it’s important now more than ever to implement elements related to portfolio security has risen through the year, with 45% of individuals saying they are willing to give up some relatively highly profitable securities for financial products that offer a more balanced approach to risk and reward.
“Market volatility over the past six to eight weeks should serve as a wake-up call to anyone who doesn’t have protection against risk built into their retirement portfolios,” said LaVigne in a prepared statement. About 57% of individuals from Allianz’ study said they wish they had set up more secure portfolios before the pandemic hit, however 42% of individuals say now is a good time to invest in the market.
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