While more Americans than ever are depending on Social Security to fund their retirement, most of those recently surveyed don’t think that the money they receive will be enough to live on. The study was performed by Hartford Financial and could mean big business for their annuity sales. Annuity News Journal’s article “Social Security Becoming More Important” by Errol Baddoo highlights the results of Hartford’s survey. Forty percent of those surveyed think that Social Security will be their most important source of retirement income, but eighty-five percent of people don’t think that Social Security will cover all of their living expenses. This discrepancy means that Americans need another way to finance their retirement to supplement Social Security payments. Hartford Financial and other insurers hope that annuity products will be that bridge.
Seventy-five percent of those surveyed think that it is their own responsibility to plan for their retirement and are not expecting the government to carry them through. Purchasing an immediate annuity with savings, 401k, or other funds can help cover basic living expenses in retirement. Hartford and other insurers have options for fixed annuities, variable annuities, indexed annuity products and others that allow investors many options with low risk. The recent decline in the economy has made Social Security even less attractive because of tremendous losses. Annuity products are expected to have a large increase in sales going forward as investors look for products with both lower risk and better guarantees. Decreases in annuity sales in 2008 and 2009 have already led to increasing sales in 2010.