Survey: Older Americas Wary of Stock Market Investment

The survey of 1,000 individuals aged 55 to 80, commissioned by NAVA, Inc., the Association for Insured Retirement Solutions, asked respondents about their interest in investment products that mirrored variable annuity features and costs. More than half (54%) of all respondents say they would be more likely to invest if they could be guaranteed they would suffer no losses.

Nearly 70% of those saying they would consider buying an annuity say they would pay 1% of their investment each year as insurance for a guaranteed withdrawal of 7% of the investment annually until the entire was received.

Nearly the same number of respondents (67%) says they would allocate 1% of their investment value per year for the guarantee that, if they kept the investment for five years, they would never lose any of their investment and would receive all market gains.

“Fear of investment loss stops them from optimizing their investments in equities, which offer the potential for greater returns than bonds or CDs,” said Matthew Greenwald. “Variable annuity living benefits offer these individuals sufficient protection to invest in the market and potentially build a larger nest egg for retirement.”

The survey also found that African American and Hispanics have the greatest fear among all respondents of losing their investments, with one in five of each minority group saying they are not willing to take any investment risk, compared with one in twelve whites.

Other survey findings with regard to African American and Hispanics’ investment fear:

• Hispanics and African Americans have less experience investing in the stock market than do whites.
• Nearly half of African Americans and Hispanics do not have a financial adviser, compared with a third of whites.
• More than half of Hispanics call their investment style too conservative to meet their goals, compared with a quarter of African Americans and whites.
• Hispanics value investments with guarantees more than whites.