While the financial climate is likely to continue its up and down pattern in 2012, the safety of annuities will keep their popularity intact this year. Eric Thomes of Life Health Pro gives five predictions for annuities in 2012 in his article, “Annuity Industry Crystal Ball: 5 Predictions for the Year Ahead.” First of all, chances are good that interest rates will remain low this year. Even with low fixed annuity rates, sales of annuities hit records last year. The industry has done a fantastic job of showing people that making money in retirement isn’t the only thing to focus on; it’s also important to protect the money that you have already made.
Markets are likely to remain volatile and the news media is hyping this up to the maximum. The best thing you can do is maintain a financial professional that you trust to sort out the headlines and make sound decisions. A volatile market is not necessarily a bad thing for annuity investors. The industry needs to focus on the safety of annuities so that its clients don’t panic in down markets or rush into rash transactions when markets are up. November’s presidential election will keep retirement a big topic in the news. From Social Security and pensions to tax changes, regardless of the election’s outcome, annuity holders will be safe.
Fixed equity indexed annuities will be more popular than ever in 2012. The end of 2011 brought new companies into the fixed indexed annuity market, companies who had never previously sold this type of annuity. A rough financial market has highlighted the benefits of market downside protection and potential for upside gain that are offered by fixed equity indexed annuities. More sellers means innovation and better choice in the fixed indexed annuity market. Finally, investors will continue their need for safety and security in retirement. The guaranteed income that you cannot outlive is an annuity benefit unparalleled in the financial world. It is up to insurers and advisors to educate their clients about annuity benefits.
Written by Rachel Summit
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