Guaranteed Lifetime Income Study 2020 (GLIS) - Why Retirement Income Planning Matters: Advisors, Consumers Did Not See Coronavirus Crash Coming
Jun 8, 2020
WASHINGTON, June 9, 2020 /PRNewswire/ -- Despite growing attention to the coronavirus in the run up to the March stock market crash, the sixth annual Guaranteed Lifetime Income Study (GLIS) by Greenwald & Associates and CANNEX finds that few clients or advisors believed a market downturn was very likely in 2020. Similar to findings from previous periods of market volatility, the study shows higher client interest in guaranteed lifetime income compared to 2019.
Guaranteed Lifetime Income Study 2020 Top 10 Findings
Likelihood of Stock Market Experiencing a Downturn & Guaranteed Lifetime Income
These are among the Top 10 Findings of the GLIS surveys of 1,000 Americans between the ages of 55 and 75, with at least $100,000 in investable assets, and 302 financial advisors with at least $15 million in assets under management. The research, fielded mid-February in the days before the market crash, provides comprehensive insights into client and advisor perceptions of guaranteed lifetime income products and their role in the retirement planning process.
The study shows 11% of clients considered a market downturn was very or extremely likely in 2020, although 29% considered a downturn at least somewhat likely. A third (35%) of surveyed clients considered a downturn very or extremely likely within 5 years. Surprisingly, even fewer advisors were anticipating a downturn in 2020, with only 6% saying it was very or extremely likely and 17% at least somewhat likely. The majority of advisors considered a market downturn very or extremely likely (60%) within five years.
"Following a 10-year bull market, the research shows clients largely optimistic about the outlook for the market in the days before the collapse and confident they would be able to weather a downturn," said study director, Doug Kincaid of Greenwald & Associates. "Although it will take some time to evaluate the impact of the crisis on retirement plans, the research findings underscore the importance of having a solid retirement planning process that takes into account unforeseen events."
Over the last six years, GLIS studies have shown that guaranteed lifetime income generally becomes more attractive during market downturns and volatility. This year is no different. There was increased interest in guaranteed lifetime income in 2020 with 71% of clients stating it was a highly valuable addition to Social Security, up from 67% a year ago.
"A black swan event, COVID-19, has upended lives, the economy, and financial markets in ways that are likely to drive demand for guaranteed lifetime income in retirement," said Tamiko Toland, head of Annuity Research at CANNEX. "The research demonstrates the critical role advisors play in communicating the value of these products in retirement plans, but also that they generally underestimate clients' interest in guaranteed lifetime income."
In fact, only 14% of advisors believe their average client is highly interested in guaranteed lifetime income, while 42% of consumers say they are highly interested or already own a GLI product. Three in five clients say advisors have a responsibility to present guaranteed lifetime income products as part of a retirement income strategy. Eight in ten believe advisors should present two or three options for producing income in retirement.
The research also sheds light on advisor perceptions of the SECURE Act. Three in ten advisors believe the increased availability of annuities in 401(k) plans will increase the number of annuities they sell and 35% believe it will increase client receptivity to annuities. Importantly, it highlights consumers' and advisors' belief that estimates of monthly retirement income, mandated by the Act, are more helpful for retirement planning than savings goals or estimates of retirement expenses.
Additional supporting charts and data on the 2020 Guaranteed Lifetime Income Study are available at www.greenwaldresearch.com/glis or http://www.cannex.com/index.php/2020-gli-study-u-s.
About Greenwald & Associates
Greenwald & Associates is a market research firm that specializes in subjects related to health and wealth. Greenwald & Associates conducts both custom proprietary work as well as thought-leadership public release studies, such as the Guaranteed Lifetime Income Study and the Retirement Confidence Survey. Founded in 1985, Greenwald & Associates has conducted research for well over 100 of the nation's largest financial services companies. For more information on the firm, visit www.greenwaldresearch.com.
About CANNEX
CANNEX Financial Exchanges Ltd. supports the exchange of pricing information for annuity and bank products in North America. The firm provides financial institutions with the ability to evaluate and compare various guarantees associated with retirement savings and retirement income products. In the U.S. this includes the evaluation of annuity guarantees (Income Annuities, Variable Annuities, Indexed Annuities, and Fixed Rate Annuities) and consulting services supporting the optimization and allocation of retirement income portfolios. For more information about CANNEX, visit www.cannex.com.
Contact:
Simon Erskine Locke
Tel: +1-917-359-6969
SOURCE Greenwald & Associates; CANNEX
Related Links
More News
Fridges in French supermarkets hit by cyber attack
Hundreds of stores were targeted by the overnight hack, which spoiled fresh and frozen food estimated to be worth millions of euros.
America’s Favorite Fruit Is Being Bruised by the Iran War
The journey of one banana from farm to store shows how the war’s economic effects have cascaded into some surprising industries.
What are your rights on auto-renew subscriptions?
Martin has advice for listeners caught out by auto-renewing subscriptions, explaining what rights consumers have and whether there's a way to challenge the renewal or cancel.
Europeans Have a Love-Hate Relationship With Chinese Cars
Consumers across the continent increasingly want to buy low-cost Chinese vehicles. Policymakers are seeking to slow them down.
How American Retirees at Different Incomes Rely on Social Security
Social Security funds are on track to run short by 2032, which would mean a reduction in benefits. Here’s how four hypothetical households rely on the program in retirement.
Why some have no choice but to pay costly oil prices
Rural communities are badly hit by the rising cost of heating oil, as our Wiltshire reporter explains.
AI minister warns 'likely' UK's cyber defences will be breached
Kanishka Narayan said the government will use advanced AI to strengthen the UK against cyber attacks.
World’s Energy Order Tested Again as Iran War’s Reach Extends Further
“We are entering an age of prolonged insecurity,” one former U.S. energy official said of what have become chronic threats on the Middle East’s energy core.
Elon Musk, Delta Airlines and a Feud Over In-Flight Wi-Fi
Mr. Musk, whose company SpaceX owns Starlink, has attacked the top executive of Delta Air Lines for not selecting the internet provider.
Strikes Put Saudi Arabia’s Economy Under Pressure
Deadly attacks on the main Saudi airport add to the challenges facing the country, as it seeks to maintain energy production and keep major events on track.
'12345' hotline: One-stop hotline for all of Beijing's residents
'12345' hotline: One-stop hotline for all of Beijing's residents
China details consensus with EU on hybrid, EV trade
The consensus reached between China and the European Union (EU) on hybrid and electric vehicle trade has helped prevent an escalation of trade frictions, a spokesperson for China's Ministry of Commerce said on Monday.
YOUR NEWS, OUR NETWORK.
Do you have Great News you want to tell the world?
Be it updates about your business or your community, you can make sure that it’s heard by submitting your story to our network reaching hundreds of news sites across 6 verticals.