Tell us somethin’ we don’t know.
Americans want to lock down a reliable source of income for life (above and beyond Social Security).
New research from LIMRA Secure Retirement Institute (LIMRA SRI) seems to confirm it once again.
Annuity owners were surveyed about why they chose to buy them. The top two responses: to supplement pensions and Social Security, and to receive guaranteed income payments for life.
“Our research consistently shows consumers are worried about running out of money in retirement—67 percent of pre-retirees list having enough money throughout retirement as their top financial goal,” Jafor Iqbal, assistant vice president, LIMRA SRI, said in a statment.
“Annuities are fundamentally unique investment products, offering some combination of guarantees—guaranteed income that investors cannot outlive, protection of principal from market volatility or guaranteed death benefits for beneficiaries. As more Americans face retirement without the benefit of a pension and growing longevity risk, an annuity can provide peace of mind,” he added.
The study also found only around half of people getting ready to retire and about a third of workers in their 40s and early 50s are counting on Social Security or pensions to pay for much when they stop working—quite a shift from retirees today. Seventy percent of retired respondents said they primarily rely on money from those sources.
Retirees of the future will instead look to 401ks, IRAs and so on. Data show four in 10 older workers and over half of younger workers agree.
“While these savings platforms are good solutions for accumulating assets, they often do not offer a way to create guaranteed income that retirees say they want and need,” Iqbal emphasized.
“Working with an advisor to create a formal retirement plan, consumers can determine whether investing a portion of their nest egg into guaranteed income through an annuity is a good solution for them. Our research shows seven in 10 retired annuity owners are more confident that they are more likely to afford their preferred retirement lifestyles—even if they live to age 90 or older.”
The research was published in LIMRA SRI’s latest Retirement Income Reference Book.
Jessa Claeys is a writer, editor and graphic designer.
