After Summer of Optimism, Worries over Future Market Crash Reach Highest Levels in 2021

Allianz Life study shows concern over risks to retirement security like volatility, inflation, and the impacts of COVID-19 are all on the rise

Key findings snapshot:

  • 54% worry that another big market crash is in on the horizon (up from 45% in Q2)
  • 69% are worried that the increase in COVID infections will cause another recession
  • 78% of Americans expect inflation to get worse over the next year

MINNEAPOLIS – Oct. 4, 2021 – After a summer of relative calm, Americans are increasingly worried about retirement risks related to market volatility, inflation, and COVID-19, according to a new study from Allianz Life Insurance Company of North America (Allianz Life).

The Q3 Quarterly Market Perceptions Study found that people are more worried that a big market crash is in on the horizon than they have been all year (54% in Q3 2021, compared with 45% in Q2 and 52% in Q1).

These worries come as cases of the Delta variant rise, and markets continue their volatile trajectory.

“People were feeling better about market risks to their retirement this summer when we saw that brief return to normalcy before getting a Delta-driven reality check,” said Kelly LaVigne, VP of Consumer Insights, Allianz Life. “Now, nearly seven in 10 (69%) say they are worried that the increase in COVID infections will cause another recession.”

As a result, more than one-third (36%) say volatility is making them nervous about their nest egg, and more than two-thirds (67%) say they are keeping some money out of the market to protect it from loss.

Rising worries over inflation

In addition to concerns about the impact of market volatility on retirement security, worries over inflation are also high – with many believing it will get worse and affect retirement plans. The study found that 78% of Americans expect inflation to get worse over the next year, and 69% say it will negatively impact their purchasing power over the coming months.

Specific to retirement planning, 72% say they are concerned the rising cost of living will impact their retirement plans, and 70% say they are worried they will be unable to afford the lifestyle they want in the retirement. At the same time, about half (57%) say they have a financial plan in place to help address the rising cost of living.

More interest in protecting assets

These economic risks have fueled renewed interest in protection products, currently reaching levels not seen since mid-2019. The study found that people are increasingly likely to say it’s important to have some retirement savings in products that protect from market loss (70% in Q3 compared with 64% in Q2). Further, nearly three quarters (72%) say they would be willing to trade off some upside growth potential to have some protection from market loss.

Those with high investable assets (>$200k), are even more likely to agree that it is important to protect retirement savings from loss (83%), and that they are willing to sacrifice gains for this protection (81%).

“With markets turning more volatile again and uncertainty lingering around the Delta variant, it’s logical that people might be looking for increased protection for their retirement savings, especially if they were negatively impacted by previous volatility due to COVID,” said LaVigne. “Leveraging protection products can be a good way to participate in the markets so they don’t miss out on potential gains, instead of leaving money on the sidelines.”



*Allianz Life conducted an online survey, the 2021 Q2 Allianz Life Quarterly Market Perceptions Study, in May 2021 with a nationally representative sample of 1,005 respondents age 18+.

*Allianz Life conducted an online survey, the 2021 Q3 Allianz Life Quarterly Market Perceptions Study, in September 2021 with a nationally representative sample of 1,005 respondents age 18+.

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the FORTUNE 100 Best Companies to Work For® and one of the Ethisphere World’s Most Ethical Companies®, has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2020, Allianz Life provided additional value to its policyholders via distributions of more than $10.1 billion. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 150,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.