It’s not surprising that an annuity provider would release a study saying Americans’ interest in adding annuities to employer-sponsored retirement plans is on the rise, but that doesn’t make it any less true.
As the SECURE Act of 2019 opened the door for annuities to become part of employer-sponsored retirement plans like a 401(k), awareness—and demand—has been gradually building as more and more options are being made available.
A new study released today from Minneapolis-based Allianz Life shows how interest in in-plan guaranteed lifetime income solutions has risen in the past three years.
The study found that nearly seven in 10 (68%) would like more information about annuities as part of their plan. That’s an increase from 62% who said the same in 2022 and 56% in 2021.
At the same time, 67% say they would consider adding an annuity to their plan if it was available, up from 60% in 2022 and 59% in 2021.
“Americans are eager to have their plan sponsors add a guaranteed lifetime income option such as an annuity as part of their employer-sponsored retirement plan,” said Matt Gray, head of employer markets, Allianz Life. “In today’s economic environment, adding an annuity to a portfolio can help mitigate risks to a retirement strategy and improve outcomes.”
The Allianz Life study notes the shift is happening as Americans increasingly rely on defined contribution retirement plans sponsored by their employer to fund their retirement. More than three in four (77%) say having an option that allows them to build a protected foundation for lifetime income would increase loyalty to their employer, up from 74% in 2022 and 65% in 2021.
The majority of Americans (72%) say that they expect most of their retirement income will come from money in their employer-sponsored plans. At the same time, 66% worry they will run out of money from their plan during retirement.
Earlier this year, a report from LIMRA predicted much greater adoption of guaranteed income solutions in late 2023 through 2024 if providers step up education efforts. The organization projected the exponential growth thanks in part to additional favorable changes for in-plan annuities brought on by SECURE 2.0.
In addition, recent research conducted by Morning Consult for the American Council of Life Insurers (ACLI) shows retirement savers are eyeing guaranteed lifetime income products and financial planning options as key financial supports in the current economic environment.
The nationwide survey of more than 1,000 retirement savers—pre-retirees 45 to 65 years old—finds 54% reporting today’s economy has them considering “a guaranteed lifetime income product that pays out like a pension.”
SEE ALSO:
• In-Plan Annuity Market Will Grow Exponentially Over Next 2 Years: LIMRA
• Nationwide Launches Buffer-Protected Annuity Product
• Nearly 4 in 10 Americans Say Their Retirement Strategy is ‘Derailed’
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
