A recent study from LIMRA showed that 35% of retirees use annuities to finance their retirement, according to USA Insurance’s Insurance Corner. In the article “Study: Annuities could become larger income stream for retirees,” it is suggested that this percentage is likely to increase rapidly in the future. Fifty percent of retirees between the ages of 75 and 79 use annuity products to help pay their expenses. Twenty percent of those under the age of 65 are using annuities, but that’s not to say that they won’t purchase an annuity at some point during retirement. Immediate annuity rates may be a strong factor in determining which products these retirees use to finance their retirement.
The majority of Americans use pensions and social security as their main retirement income. But we all know that traditional pensions are becoming obsolete and even if social security stays around, it is not likely to be enough income to carry you through retirement. Annuities only account for 4% of current retiree income, a number that surprises me. With excellent fixed indexed annuities and other options out there, I’d expect that 4% to skyrocket over the next few decades. It’s crucial to protect your assets, which consumers with $250,000 to $499,000 in assets seem to realize more that others. Half of them already receive annuity payments, many of which are guaranteed for life. If you have any questions about how an annuity product can finance your future, speak with one of our experts.
Written by Rachel Summit