Background: Allianz Life conducted an online survey, the 2024 2Q Quarterly Market Perceptions Study, in May 2024 with a nationally representative sample of 1,005 individuals age 18+. The study included an oversample of respondents who identified as Black/African American (277 responses); Hispanic (265 responses); Asian/Asian American (265 responses). In this Research Minute, we will delve into the study's findings on participants' demand for in-plan guaranteed lifetime income solutions, such as annuities.

Findings: Generational differences and demographic factors significantly impact individuals' perceptions and preferences regarding in-plan annuities in their employer sponsored retirement plans. Gen X and Millennials showed the highest levels of interest, as 68% and 67%, respectively, considered adding an annuity to their plans.

These generations are particularly concerned about potential retirement fund depletion and express greater interest in products that offer supplemental guaranteed income beyond Social Security and protection from market downturns.

Source: 2Q 2024 Quarterly Market Perceptions Study, Allianz Life Insurance Company of North America (Allianz)

When examining specific product features, all generations placed value on accessibility, flexibility, portability, and growth potential. However, Gen X had a heightened focus on features such as additional withdrawals and flexibility in choosing when and how to take income from the annuity. These preferences align with Gen X's concerns about running out of money in retirement and the need for options that can adapt to changing circumstances.

Ethnicity also played a role in individuals' awareness and interest in in-plan annuities. Hispanic participants exhibited the highest desire to learn more about annuities, with 77% expressing interest, followed by Black/African American participants at 74%. Asian/Asian American participants displayed slightly lower interest at 68%, while white participants showed the lowest interest at 62%. This aligns with their desire for

retirement plan options that provide protection for their money during market downturns. The majority of Hispanic (82%), Black/African American (81%), and Asian/Asian American (79%) participants expressed a wish for more options that safeguard their money. In contrast, 71% of white participants shared this sentiment.

Apart from protection in market downturns, participants across all ethnicities valued other annuity features including flexibility, accessibility, IRA portability, growth potential, and personalization.

Bottom line: Understanding these generational and demographic differences can assist employers in tailoring their retirement plans to meet the unique needs and preferences of their workforce.

You can find an extended summary of this study here.

Insights shared by guest contributors are their own and do not represent the views of DCIIA or the RRC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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