New Study Reflects Financial Concerns by Consumers

In the latter months of 2021, the stock market exhibited some serious volatility, and the market in early 2022 has exhibited much the same.  According to findings from the 2021 Q4 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America (Allianz Life), Americans expect that volatility to continue, as three-fourths of respondents say they expect the market to be very volatile throughout 2022.

And volatility is just one aspect of their financial concern.

The study was fairly wide-ranging, even touching upon attitudes about and perceptions of the pandemic.  Amid rising case numbers from the Omicron virus variant, 67% of those surveyed said they are worried that new COVID variants will cause another recession. As inflation hits 40-year highs, 74% reported that they are concerned about purchasing power over the next six months. Another 64% said that their income is failing to keep up with expenses. The same percentage worry that their income will not keep pace with tax increases.

“There are a lot of risks being amplified as we kick off 2022, and nearly eight in 10 (77%) expect the market will remain volatile this year,” said Kelly LaVigne, Vice President of Consumer Insights, Allianz Life. “Further, 59% say they expect a market correction in 2022, which hopefully means people are starting to think about steps to take now to protect themselves if that happens.”

It’s difficult to overstate the importance of these concerns, especially to your clients’ retirement plans.  This survey shows that, while many people are struggling to navigate these challenges in the short term, 57% say risks from market volatility will have a major impact on their plans to retire in the next few years. With added pressure from increased uncertainty, 61% say they are concerned that their existing financial strategy won’t fuel the kind of lifestyle they’d like to live in their retirement years.

“With all these different factors looming, it’s a critical time for people who are approaching retirement age to think about how to mitigate these risks and adjust their retirement strategies,” said Mr. LaVigne.

There are additional risks and concerns the Allianz survey revealed. One-third said that putting some money into a financial product that provides a guaranteed stream of income in retirement is the most important step in establishing a secure retirement. Gen Xers expressed the most interest in a product that offers guaranteed income (39% compared with Millennials at 33% and boomers at 30%). At the same time, 66% of survey respondents say it’s important to have some retirement savings in a financial product that protects it from market loss.

These responses and the concerns that they reflect show that your market is in a clear “we need your help” state of mind.  You have the tools that can help eliminate some of those risks that concern them. Use those tools and make a difference for your clients.

Charles K. Hirsch, CLU, is the president of Hirsch Communications Consulting, LLC, a communications consulting operation in Florissant, MO. For many years, Chuck was the editor and publisher of Life Insurance Selling magazine and has published several of the leading life insurance industry magazines. He continues to contribute articles on a regular basis to industry publications, in addition to providing a wide range of writing, editing, content development, and marketing services through his firm. He is a regular contributor to NAILBA Now e-Newsletter as well as to Perspectives magazine.