‘A great deal of uncertainty’: 61% of older Americans would rather preserve their nest egg than grow their net worth — could you be playing it too safe?

Investments prioritizing stability

Prioritizing protection over growth isn’t new. But might be starting sooner for more of us.

As retirement nears, conventional wisdom suggests gradually reducing the risks of our wealth-building years by rebalancing the portfolio. This involves incorporating more stable income-producing assets like bonds and dividend-paying stocks. Then, during retirement, the emphasis is on generating consistent income to cover living expenses while minimizing the risk of significant losses. Conservative investments like fixed-income securities, annuities, and dividend stocks become more prominent.

The Global Atlantic study suggests current economic uncertainty and recent market volatility are leading many retirement-age Americans to question tradition and start prioritizing wealth protection earlier — even sacrificing some potential growth — to safeguard savings and create reliable retirement income streams.

Several investment options cater to retirees' desire for a constant rate of return and protection from market fluctuations:

• Annuities: These insurance contracts provide a guaranteed income stream for a specified period or even for the lifetime of the annuitant. Different annuity types exist, offering varying levels of income and potential for growth.
• Certificates of Deposit (CDs): Issued by banks and credit unions, CDs offer a fixed interest rate for a set term. Their safety and guaranteed returns make them a popular choice for risk-averse investors.
• Fixed-indexed annuities: Combining features of traditional annuities and market-linked investments, fixed-indexed annuities offer some downside protection while also providing potential for income growth.

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The importance of personalized advice

While these options can provide retirees with much-needed stability, it's crucial to remember that every individual's retirement goals and needs are unique. Consulting a qualified financial adviser is always recommended. A financial professional can help retirees develop a tailored investment strategy that aligns with their risk tolerance and specific financial objectives.

And according to Paula Nelson, Global Atlantic’s head of strategic growth for individual markets, there’s no better time than now to seek support.

“With multiple domestic and global events impacting the market, we think it is more important than ever for financial professionals to have regular and meaningful conversations with their clients about income protection,” said Paula Nelson, Global Atlantic’s Head of Strategic Growth for Individual Markets.

“There is undoubtedly a great deal of uncertainty among retirement-age investors, and the survey findings highlight that those nearing or already in retirement understand the overall importance of these topics.”