New York —The retirement market will grow substantially over the next ten years, according to a study from asset management firm Allianz Global Investors AG (AllianzGI).

Titled “Retirement at Risk: The U.S. Pension System in Transition,” the study substantiates the trend toward individuals bearing more responsibility for their retirement funding, as well as the dismal prospects for Social Security. The potential for funding shortfalls abound, with the current acute financial crisis, skyrocketing health care costs and limited access for many to employer-sponsored plans.

The study indicates, however, the U.S. pension market may be better off than that of other industrialized nations. Despite challenges, AllianzGI calculates U.S. pension assets could reach $25.5 - $36 trillion by 2020.

Currently estimated at $17.3 trillion (figures are year-end 2007), the U.S. pension market is the largest, most developed in the world—and is likely to remain dynamic as investors seek investment strategies that not only target returns but also provide risk management and features that factor in an individual's age, life expectancy and target retirement date.

"Current economic conditions may impact long-term pension saving by tempting people to draw down pension assets to alleviate financial hardships such as mortgage financing problems,” states Brigitte Miksa, head of international pensions at AllianzGI. “However, even the most pessimistic scenarios foresee a large accumulation of pension wealth in the coming decade."
Source: Allianz Global Investors AG

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