A recent Allianz survey found continued growth in the U.S. retirement market. The results are detailed below.
The U.S. remains the leading retirement market, accounting for more than half of the world’s total retirement assets of nearly $28 trillion, according to a new report.
The report by Allianz Life Insurance Co. of North America, Minneapolis, Minn., forecasts the U.S. retirement market will dominate the world pension market until the end of the decade even though it is only expected to grow by a 3.6% compound annual growth rate (CAGR).
In size, the U.S. retirement market is followed at 11.5% by the United Kingdom. Western Europe’s combined retirement assets came to slightly more than 20% while Australia and Japan each claim 3% of the global market.
The emerging economies of Asia and central and eastern European, which are still in the early stages of building up their individual funded pension systems, represent only minor shares (1.8% and 0.4%, respectively), Allianz finds.
The report expects global retirement assets to accumulate to $46 trillion by 2020. The global retirement market is forecast to grow by 66%, representing an annual growth rate of 4.7%.
Total pension assets would increase to $46 trillion from $28 trillion, the study says.
At year-end 2008, global pension assets stood at $26 trillion, down by roughly 15% from year-end 2007 ($30 trillion), the study finds.
What the study does not go on to describe is the movement toward guaranteed income and guarantee of principal products and their increasing popularity. LIMRA has forecast significant growth in these product areas, because their popularity is highly linked to demographics–as people (baby boomers) reach their 60′s and later 60′s, they needs will evolve from accumulation to income. They investment practice biases will naturally evolve from growth to preservation of capital. Index annuities and fixed annuities are the key products for these changing savings preferences.