Allianz Life Insurance on Monday released a new research paper, “Rethinking What’s Ahead in Retirement,” that finds Americans are now more concerned about guarantees and retirement income in retirement than they are on returns and control.

Authored by Allianz Life President and Chief Executive Officer Gary C. Bhojwani, the paper identifies three waves of retirement thinking since World War II.

In the first wave, Baby Boomers’ parents focused on financial safety, with the bulk of their assets at banks and insurance companies.

In the Boomer-led second wave, retirees focused on rate of return and asset mix, but today, concerns about market risk have led to a new emphasis on guaranteed lifetime income.

“The three-legged stool of retirement funding—government via Social Security, employers through defined benefit plans and individual savings—is less reliable than ever before,” Bhojwani said. “Two of the three legs are shaky, which means personal assets are taking a bigger role to keep the stool upright. Boomers now know they may outlive their assets and thus must learn how to convert those assets into guaranteed retirement income.”

The paper points to a number of dangers that retirees will face, starting with longer life expectancies and ongoing medical breakthroughs. In addition, healthcare costs continue to rise and markets remain volatile, making planning withdrawals extremely challenging.

“While it is hard enough to accurately project an average annual return over an extended period of time, it is essentially impossible to project specific returns each year and determine how they will affect a distribution strategy in retirement,” Bhojwani said.

The paper suggests that annuities that guarantee lifetime income could be a suitable solution.

“Americans have come to grips with the new reality that it is nearly impossible to feel secure about retirement income if some of it is not guaranteed,” Bhojwani said. “The fear about outliving one’s assets is very real. “This is fundamentally changing the behaviors of all consumers and is a catalyst for new thinking.”

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