63 Percent of Boomers Fear Not Having Enough Money for Retirement, but Many Wary of Investing in Stocks.

Lack of Retirement Preparedness and Pervasive Fear of Stock Market Investing Indicates Need to Re-define "Retirement Risk Tolerance"

RESTON, Va. -- A commonly held American belief about financial retirement planning may be in need of a change. Traditional retirement planning approaches recommend that as Americans age, their portfolios should include an increasingly higher percentage of fixed investments, and a lower percentage of riskier equity investments. However, new data released today may call this conventional approach to "retirement risk tolerance" into question.

Today, NAVA reports that while a majority of Americans acknowledge they may not have enough money for retirement, many also are wary of investing in the stock market, where the historically higher returns may offer the quickest way - or in some cases the only way - to boost their sagging retirement assets.

Sixty-three percent of Americans aged 50 to 59 said they are concerned about whether they will have enough money to maintain their desired lifestyle in retirement. The picture is slightly better for Americans in all other age groups, but not much, with 50 percent expressing such concerns. Yet, when asked how much of their retirement assets they would be willing to invest in the stock market, 32 percent of baby boomers surveyed replied they would not be comfortable investing anything at all in the stock market. In addition, less than one-fourth (22 percent) of respondents of all ages would be comfortable investing more than 30 percent of their assets. These findings highlight a growing dilemma for many baby boomers who are behind in their financial retirement planning, as many may not be able to generate the investment returns necessary to adequately fund their retirements.

According to Mathew Greenwald, president and CEO of Mathew Greenwald & Associates, Inc., a premier public opinion and market research company, a number of factors are necessitating a change in the way Americans tolerate investment risk in retirement. "With Americans living longer, coupled with rising healthcare costs, the decline of company pensions and dismal national savings rates, many will need much more retirement income than they originally thought," notes Greenwald. "For many retirees and near-retirees, this may mean that they need to keep a higher percentage of their assets in equity investments, including variable annuities, which offer potentially greater returns than more conservative financial vehicles, such as CDs and bonds."

Additional data released today by NAVA highlights factors that could impact the conventional view of consumers' retirement risk tolerance:

* Fretting fortysomethings - Sixty-seven percent of Americans between age 40 and 49 are either somewhat or extremely concerned about having enough money to maintain their desired retirement lifestyles; 58 percent of Americans age 39 or younger share this feeling.

* Older Americans, retirees are risk-averse - Fifty percent of respondents age 60 and older and 50 percent of retired respondents said they would not invest any of their assets in the stock market.

* Women, unmarried Americans avoid stocks - Forty-one percent of female respondents and 42 percent of unmarried Americans said they would not invest any of their retirement assets in stocks.

"Many Americans can benefit from annuities as part of a new retirement risk tolerance model," said Mark Mackey, president and CEO of NAVA. "A variable annuity is the only financial product that offers the best of both worlds to many Americans who are financially unprepared for retirement. Variable annuities allow individuals to invest in stock funds that typically generate higher returns, and as a result, larger retirement nest eggs, than fixed investments. At the same time, unique annuity insurance guarantees protect assets from market downturns, giving individuals the confidence and peace of mind to stay invested in the market for as long as they need to."

An annuity is a financial retirement vehicle offering a combination of insurance benefits, tax-deferred savings and guaranteed lifetime income payments. Variable annuities allow individuals to invest in a variety of underlying fixed and equity funds, and provide returns based on the performance of these funds. Valuable annuity insurance features include beneficiary protection in the form of the guaranteed minimum death benefit, and living benefits which protect against downside market risk. A variable annuity also offers the ability to convert retirement savings into a steady "paycheck" for life, similar to pension plan payments.

The retirement risk tolerance data was generated by Kelton Research in September 2006 for NAVA. A broad national cross-section of 1,000 respondents was polled via telephone between Sept. 8 and Sept. 18. The survey has an error rate of +/- 3.1 percent.

About NAVA

NAVA is a non-profit trade association located in suburban Washington, D.C. NAVA provides a variety of services to the industry including educational forums, research and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance. NAVA also maintains and supports an educational website for consumers at www.RetireOnYourTerms.com.