Northwestern Mutual has been offering two new successful income annuity products since 2012. Both of these annuities have been focused on 401k and IRA rollovers rather than the individual investor market. But according to Benefits Pro, “Northwestern Mutual (is) extending (their) annuities push to (the) retail market.” Nick Thornton discussed how the insurer is responding to the increasing demand in America for guaranteed retirement income. They are planning to sell more longevity annuities in the retail market to go along with their strong presence in the qualified retirement plan market.
The two income annuities that Northwestern Mutual is expanding into the retail market are their Select Portfolio Immediate Income annuity and their Select Portfolio Deferred annuity. In addition to marketing their income annuities to 401k annuity and IRA rollover plans, they are also targeting sources of personal funds as well. Personal savings, inheritances, and home or business sale proceeds are other financial sources that individuals can use to purchase an immediate or deferred income annuity. Northwestern Mutual found that many Americans are concerned about their longevity risk in retirement. Their Portfolio Income annuities protect not only against longevity risk, but also market and inflation risk.
Around 25% of the people surveyed by Northwestern Mutual don’t think that they can finance a retirement to age 75. More than 30% are concerned that they won’t be able to finance to age 85 and more than 40% don’t think they can finance to age 95. Not everyone will live that long, but those who do really need to have a financial plan in place. Financing the rest of your life with a guaranteed income stream takes away a lot of worry about your future.
One of the unique aspects available with Northwestern Mutual’s Portfolio Income annuity products is that they offer the potential to receive dividends that can buy you additional future income. One of the company’s vice presidents stressed that annuities are one of the only ways to guarantee lifetime income, especially now that pensions are becoming a thing of the past. He also said that while more Americans are aware of their need to create a lifetime income stream, they are not educated on how to go about financing this. The Portfolio Income annuity products have sold more than $1 billion in premiums and hold approximately 20% of the market share. The insurer believes that by expanding their income annuity line more into the retail market, they will help Americans find the guaranteed lifetime income stream they need to alleviate their longevity risk during retirement.