AGEIST collaborated with Jackson on an investor survey to discover how the COVID - 19 pandemic may have affected the outlook those aged 50 to 70 had on their future. In part one of this three-part series, we will dive into the key findings of that survey and reveal what impacts the pandemic had on some investor’s financial futures.
When a relatively short-term even affects our long-term outlook
In 2020, AGEIST collaborated with Jackson on an investor survey to discover how the COVID - 19 pandemic may have affected the outlook those aged 50 to 70 had on their future. We discovered that while a few areas in our study remained surprisingly unaffected by this global health event, one area in particular, was filling minds with worry in a way that was previously not - their financial futures.
What remains the same
If you are between the age of 50 and 60, and in reasonably good health, there is a very good probability that you will live several more decades. The awareness of this probability leads many to look at the future in a different way than previous generations. We are and have been curious, confident, and open to new ways of living. Our feelings of optimism and excitement around the future have not really changed. We are indeed a highly resilient group.
We assumed that a life-altering health event would shake this confidence around longevity, but surprisingly this was not the case. Most people in the AGEIST community still believe we are going to be around for a long time to come. This means the range of possibilities for the next few decades is a wide one: everything from early retirement, starting new businesses, thriving in the career you love, or starting a new life 2.0. We, as a group, are just as open and optimistic as we have ever been.
What has changed
We found a significant increase in anxiety about financial futures1. This was unexpected. Due to COVID-19, we theorized that since age placed us in a higher risk category – there would be a negative impact on confidence in our life span. But this was not at all the case. The change is actually around finances - there is now an increased anxiety around financial futures.
Perhaps the pandemic placed our minds on fast-forward, forced us to focus on future concerns, and to determine what areas are somewhat inside of our control. If we do indeed live longer, will we have enough income to support our lifespan? Will we be active and healthy enough to enjoy our longer life?
We discovered that many of you view health and wellness as a direct result of your own actions, yet you do not feel the same about your finances2. Your financial future feels directly connected to the stock markets, economic policy, and employment. In our study, very few were overly concerned with getting sick, as they could take precautions to avoid that. There was a growing worry around where the uncertainty did lie – in their financial futures.
“COVID has changed everything. I definitely look more to the importance of a fixed income versus the overall size of my portfolio,”
While this is a direct statement from a 51-year-old in our study, the sentiment was a common thread. Participants were looking for areas of certainty in life and an income for the future is coming into focus.
Those with financial plans still want to grow their assets, but they are now also looking at options to bring a bit of predictability to their financial futures.
“Everything is vulnerable. I feel like millions of others, that we are in uncharted territory,” (from a 58 year-old investor in our study).
A possible path forward
Our study revealed that many are unfamiliar with financial planning products that can offer a steady income in retirement – and one way to add predictability to your financial future is with an annuity*. Are you planning for longevity and an active lifestyle? Would a steady income add a bit of certainty to your financial future?
An annuity may be a useful tool to help reduce anxiety around your financial future. For additional information on annuities, you should speak to your financial professional.
*What is an Annuity?
Annuities are long-term, tax-deferred vehicles designed for retirement. The principal value of the variable annuity will fluctuate based on the performance of the underlying investment options and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.
Add-on living benefits, available for an additional cost, can provide a guaranteed stream of income in retirement however may be subject to conditions or limitations. There is no assurance an add-on benefit will provide sufficient supplemental income in retirement.
Guarantees are backed by the claims paying ability of the issuing insurance company.
1. Jackson Financial Research Recap, AGEIST 2020 Consumer Survey, October 2019. 804 men and women aged 50 to 70 in Atlanta, Chicago, Dallas, New York City, and San Francisco with an active lifestyle and an income above $75,000.
About the author
Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.
Jackson® is the marketing name for Jackson National Life Insurance Company® (Home Office: Lansing, Michigan)and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Jackson National Life Distributors LLC.
David Stewart is not affiliated with Jackson.