Millennials have lived through the most turbulent economic times in recent memory, and those experiences inform their financial decision-making process. A new study reveals that millennials look for retirement strategies that provide guaranteed income. This strategy may provide confidence to consumers who are wary of riskier savings plans, but it represents a significant adjustment from older generations.
Financial professionals who work with millennials should recognize their preference for low-risk retirement saving strategies, and present appropriate products. Producers should also prepare to review those policies in the future, because millennials’ hesitancy of perceived risk could change over time. More importantly, financial professionals should speak with clients of all ages about guaranteed income strategies that can supplement other retirement investments.
Millennials search for stability
The younger generation witnessed an economic downturn that decimated savings for many people in the U.S. That makes them hesitant to put their money in investments that are tightly tied to the stock market.
Annuities provide a compelling alternative, and a new study from the Indexed Annuity Leadership Council revealed that 52 percent of millennials are very or somewhat interested in annuities. The consistent retirement income annuities yield provides the steady returns that millennials want, and is a good way for financial professionals to connect with young clients.
Financial professionals can use this product to begin conversations with the next generation of high net worth clients, but annuities are just one part of a comprehensive financial plan. Financial professionals can work with millennials to develop a strategy that combines the consistent returns of annuities with other products that will help young people reach their financial goals.
A strong option for established clients
Morgan Stanley’s research into high net worth client habits found that many consumers spend too much effort on wealth accumulation, and do not adjust their financial plan to provide for consistent retirement income. That can lead to financial shortfalls in retirement, because their lifestyle requires a strong revenue stream.
Financial professionals working with older clients should review their existing policies and recommend products that provide consistent returns through the entirety of retirement. With careful planning, high net worth clients can maintain their current lifestyle after leaving the workforce.
Millennials’ interest in annuities signals a focus on stability that could benefit consumers of all ages and incomes. Financial professionals can appeal to every client’s desire for stability with annuity products.