Financial Advisor’s article “Annuities For The Middle Class?” by Eric Rasmussen discusses the recent increase in annuity purchases, especially by the middle class. Their safety and security has drawn consumers’ in by record numbers, largely due to the volatile stock market and consumers fear of losing their savings. The sales of fixed annuities nearly doubled in the last 12 months from the year prior to that according to Beacon Research. For the first half of this year, fixed annuity sales were $62.56 billion, up from $44.89 billion in the first half of 2008.
Notably, middle class consumers are making up a significant percentage of annuity sales. According to a Gallup Organization survey, 80% of annuity owners have an income below $100,000. Forty-two percent have an income below $50,000. The draw of good annuity rates and guaranteed income for life brings in consumers looking for low risk and a secure retirement. When you have less money to work with you need to make it count. Experts advise taking advantage of all company sponsored retirement plans in addition to funding your annuity and most believe that a combination of retirement products is the way to fund retirement successfully.