U.S. Pensions Study: Retirement Preparedness of Baby Boomers in Wake of Global Financial Crisis

MUNICH--(Business Wire)--
A new report from Allianz Global Investors AG (AllianzGI), one of the world`s
largest asset management companies, provides insight into the effects of the
recent financial crisis on U.S. wealth and the transition process that the U.S.
retirement landscape is undergoing. The study, "Retirement at Risk: Challenges
for baby boomers approaching retirement," examines the retirement preparedness
of baby boomers who have seen their assets deteriorate as they approach
retirement. The study also highlights the impact that retiring baby boomers -
the largest population segment in American history - will have on the financial
services industry.

Nearly $9 trillion of private household financial assets has been wiped out by
one of the most devastating financial crises in history1. Those on the verge of
retirement have been most affected by the crisis, as almost half of these losses
have occurred in retirement accounts2. Due to the shift toward self-directed
pension plans, investors are increasingly suffering the consequences of adverse
market movements. With 401(k)s and IRAs becoming the dominate retirement savings
vehicle in the United States, the priority is now shifting to investment
strategies which generate a sustainable retirement income stream from
accumulated funds.

Brigitte Miksa, Head of International Pensions at AllianzGI, says, "The recent
economic crisis has demonstrated the vulnerability of retirement portfolios,
especially of near and post-retirees who won`t have the time to sufficiently
recover the losses. The crisis has challenged the system, and combined with the
nearing retirement of the baby boomer generation, we now need to find solutions
designed for retirement which will be sustainable across various market
environments."

"Retirement at Risk II - Challenges for US Baby Boomers Approaching Retirement"
investigates the deepened effects of the global economic crisis on the ability
of baby boomers to retire over the next two decades. The market dislocation of
2008 significantly affected both high net worth and low net worth individuals,
with substantial wealth losses being highest for families at the lower end of
the wealth spectrum3. In the coming years, baby boomers will be increasingly
affected by declines in Social Security benefits and a decreasing share of
income from defined benefit pension plans. Therefore, assets invested in defined
contribution plans, Individual Retirement Accounts and nonqualified accounts
will develop into the major source of future retirement income, leaving
individual investors with a need assume responsibility for their retirement
income strategies.

The portion of a retirement portfolio earmarked to finance retirement spending
needs should be geared toward providing a reliable income stream once an
individual stops working. Products and financial advice that are designed to
support people in the decumulation phase still need to adapt to this changing
environment. Decumulation products must consider and address retirement-specific
risks like rising health care costs and inflation. The challenge for the
financial services industry will be to develop new solutions and educate
advisers on how to best incorporate these offerings into their clients`
portfolios.

Further supporting the findings from this study, a companion survey4 by
U.S.-based Allianz Global Investors Distributors reveals that many investors are
overly optimistic about their retirement visions and may need a more realistic
approach to retirement planning and investing if their expectations are to be
met.

"Despite this refreshing optimism, tremendous damage has been done and Americans
now have a lot less accumulated for retirement than they did even a few short
years ago," said Brian Gaffney, CEO of Allianz Global Investors Distributors.
"Our survey reveals a need for all of us to honestly reassess our vision of
retirement and to develop realistic and sustainable retirement savings models.
It`s important that we take to heart the lessons learned during this financial
crisis and make small changes now to improve our likelihood for a secure
retirement in the future."

- Ends -

Order a hard copy of the working paper via email
at:International.Pensions@allianzgi.com

Publications can be accessed on our website:
http://publications.allianzglobalinvestors.com/en/PensionResearch

Link to US-Survey
https://www.allianz.com/en/press/news/business_news/asset_management/news_2009-09-30.html

About Allianz Global Investors

Allianz Global Investors AG (AllianzGI), a subsidiary of Allianz SE, is a
management holding company for a network of investment specialists in the most
important institutional and retail markets around the world. Through PIMCO, RCM,
Oppenheimer Capital, NFJ, Nicholas-Applegate and several other specialist firms,
AllianzGI offers its clients a broad variety of investment competencies,
covering all equity and fixed income investment styles as well as balanced
products and alternative investments. With 1045 billion Euro Assets under
Management (30/06/2009), AllianzGI ranks among the top investment management
companies worldwide. Through its network of approximately 5000 employees around
the globe, including more than 1000 investment professionals, AllianzGI is able
to leverage local expertise and market knowledge to its clients all over the
world.

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Nothing contained herein should be construed as a solicitation of an offer to
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1 Federal Reserve, Investment Company Institute, Allianz Global Investors own
calculations
2 Federal Reserve, Investment Company Institute, Allianz Global Investors own
calculations
3 Baker, D and Rosnick, D., Center for Economic and Policy Research, The Impact
of the Housing Crash on Family Wealth, July 2008.
4 Survey conducted online by Harris Interactive within the US between July 27
and August 10, 2009, among a nationwide cross section of 1,013 pre-retired
household financial decision makers aged 30 or older with at least $250,000 in
investable assets

Allianz Global Investors AG
Karen Cooperman
Phone +49 (0)89 1220 7224
Email: Karen.Cooperman@allianzgi.com
or
Megan Frank
Phone +1 212 739 3501
Email: Megan.Frank@allianzinvestors.com
or
Anna Moulds
Phone +44 20 7294 3681
Email: Annam@lansons.com

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