Majority of American Investors Continue to Be Risk Averse, Worried about Retirement Income and Feel Like Their Financial Safety Net Has Been Taken Away

F&G Annuities & Life, Inc. (NYSE: FG) ("F&G"), a leading provider of insurance solutions serving retail annuity and life customers and institutional clients, noted that 85% of American investors1 are worried about inflation impacting their financial future, up from 79% in 2022, according to the Company's fourth annual Risk Tolerance Tracker. The heightened inflation fears come even as the CPI rate fell to 3.3% in October 2023 from 7.7% in October 2022.

Inflation is just one reason why American investors are nervous, according to the tracker, which asked American investors how the events of 2023 have impacted their views on their retirement and risk. Seventy-eight percent of investors said they are more risk averse in 2023, which is consistent with 2022 (78%), but up significantly from 69% in 2021 and 74% in 2020.

In addition, this year's tracker showed a majority of American investors (60%) continue to feel like their financial safety net has been taken away from them as a result of the past 12 months. It also found Americans are worried about retirement income, with 68% saying they are somewhat or very worried about it in 2023. This is a similar level from 67% in 2022 but still much higher than 2021 (47%) and 2020 (51%), respectively.

Need For Financial Advice

This year's Risk Tolerance Tracker also revealed that while American investors expressed a variety of worries related to their retirement, a majority (61%) are still not speaking to a financial professional, including more than half of Baby Boomers (55%) and Generation X (66%).

"Our fourth annual Risk Tolerance Tracker finds that while American investors are increasingly more distressed about their financial futures than they were at the height of the pandemic, many are still not taking action to address their concerns," said Chris Blunt, President & CEO of F&G. "Even with these worries, financial advisors continue to be underutilized. Regardless of what is happening in the world, financial advisors are a much-needed resource and key relationship to achieve ongoing financial wellness, sound retirement planning and a tailored mix of products to suit unique needs and goals."

The Annuity Opportunity

Over two in five investors (42%) said they would be more likely to explore a new financial product given increased inflation as compared to 45% in 2022 and up from 36% in 2021. However, despite having an increasing interest in new products, only 14% of respondents reported owning an annuity, which can help address many of the concerns shared around retirement income and feeling confident in one's financial safety net for the future.

What's Keeping Americans Up At Night

Besides inflation, when it comes to their financial futures, Americans note they are also worried about the next presidential election (75%) almost as much as they are about the risk of the US entering a recession (79%). Other concerns included historically high global debt (67%) and the impact of generative AI (50%).

Amid Inflation Fears, Americans Look For Extra Cash

The survey also revealed that this period of record inflation has many looking for ways to supplement their income. In fact, the tracker found an increasing number of Baby Boomers are open to other ways to supplement their main source of income (47% compared to 41% in 2022). A majority of Millennials (66%) and Gen X'ers (61%) also report being open to ways to secure additional income given current levels of inflation.

Survey Methodology

This survey was conducted online by Directions Research, independently recognized as one of the nation's leading business decision insights firms. The survey was fielded from October 10 to 20, 2023, among a nationally representative sample of 1,644 U.S. adults 30 years of age and older who have sole or shared financial decision-making responsibility for their household, and own financial products valued at $10,000 or more.

About F&G

F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa. For more information, please visit fglife.com.

1 To qualify for the survey, respondents had to be age 18+, have sole or shared financial decision-making responsibility for their household, and own financial products valued at $10,000 or more.

Annuity Alliance is not affiliated with F&G or Directions Research. This article is for informational and educational purposes only. It should not be used to make a buying decision. If you would like to speak with a financial professional, please use Annuity Alliance’s contact form.