Market volatility and retirement risk management
In recent weeks, sharp declines in global equity markets have heightened concern about the economic outlook. For instance, on 10 March 2025, the tech-heavy NASDAQ Composite Index fell nearly 4% — its steepest drop since September 2022 — while the S&P 500 dropped 2.7%. While these are US indices, the ripple effects were felt across the Australian market, with the ASX 200 also experiencing heightened volatility as investor sentiment soured.
These fluctuations — coupled with the significant risks all retirees face, ranging from sequencing of returns in the market, longevity of savings, inflation, regulatory change, spiking expenses, emotional challenges, grey divorce and loss of certainty — have made many nearing or in retirement, feel uneasy.
The current environment highlights an opportunity to address market volatility and the retirement risk zone by balancing the pursuit of growth with the need for protection. Getting this right has the potential to address a number of these risks.
A stronger foundation for retirement
To build a more secure and resilient retirement plan, it may be time to rethink traditional strategies. This includes exploring solutions that can help mitigate risks — particularly those related to market performance and longevity.
A 2022 Actuaries Institute report1 noted that combining traditional products with innovative solutions could lead to a remarkable 30 percent increase in retirement income.
Further, the report noted that methods, such as using investment-linked lifetime income streams, have been shown to lift retirement income without increasing longevity risk: a win-win outcome that would see your clients benefit from larger payments and a better quality of life without increasing the likelihood of outliving their savings1.
A growing topic of conversation is the inclusion of guaranteed lifetime income options, such as annuities, within retirement plans. These solutions aim to provide predictability and protection, addressing concerns about market volatility and longevity.
The primary goals of incorporating such solutions into a retirement plan are:
- Protect against market risk: Reducing the impact of market fluctuations on retirement income by offering growth and a downside protection mechanism limiting risk exposure, while offering the potential for the capital growth necessary to fund longer retirement periods.
- Address longevity risk: Ensuring that savings last throughout retirement by providing income certainty through a guaranteed income for life.
- Create predictability: In an uncertain world, having a predictable income stream can provide increased comfort for retirees. This can help cover essential expenses and reduce the stress of managing retirement finances.
Exploring solutions that offer a degree of protection, whether through guaranteed lifetime income solutions or diversified investment approaches, is key in today’s environment.
Learn how AGILE and its 'downside protection' feature works.
Allianz Guaranteed Income for Life (AGILE) is a solution that, once integrated into your client's portfolio, offers predictability and protection, addressing concerns about market volatility, sequencing and longevity.
1 Actuaries Institute, ‘Actuaries develop a framework for maximising retirement income’, 26 April 2022.
This material is issued by Allianz Australia Life Insurance Limited, ABN 27 076 033 782, AFSL 296559 (Allianz Retire+). Allianz Retire+ is a registered business name of Allianz Australia Life Insurance Limited. This information is current as at April 2025 unless otherwise specified and is for general information purposes only. It is not comprehensive or intended to give financial product advice. Any advice provided in this material does not take into account your objectives, financial situation or needs. Before acting on anything contained in this material, you should speak to your financial adviser and consider the appropriateness of the information received, having regard to your objectives, financial situation and needs. No person should rely on the content of this material or act on the basis of anything stated in this material. Allianz Retire+ and its related entities, agents or employees do not accept any liability for any loss arising whether directly or indirectly from any use of this material. Use of the word ‘guarantee’ in this material refers to an assurance that certain conditions or contractual promises will be fulfilled by Allianz Retire+ from the available assets of its Statutory Fund No 2, in relation to the product terms. This includes ‘guaranteed’ income payments in the Lifetime Income Phase which will be paid from the available assets of Statutory Fund No 2, noting that Allianz Retire+ may terminate the product in certain limited circumstances as outlined in the Product Disclosure Statement referred below. Allianz Australia Life Insurance Limited is the issuer of Allianz Guaranteed Income for Life (AGILE). Prior to making an investment decision, investors should consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) which are available on our website (www.allianzretireplus.com.au).
Any information on this website does not take into account your objectives, financial situation or needs. For personal financial advice please speak to your financial adviser. Products will be issued by Allianz Australia Life Insurance Limited, ABN 27 076 033 782, AFSL 296559.
Allianz Retire+ is the business name of Allianz Australia Life Insurance Limited. By using this website you agree to access this Financial Services Guide.
Allianz Retire+ is the business name of Allianz Australia Life Insurance Limited. By using this website you agree to access this Financial Services Guide.