A number of recent studies have been focused on retiree attitudes, concerns and the products that could help them take care of those concerns. In Insurance News Net’s article, “Consumer Interest in Annuities Perks as Feds Discover Value,” Arthur D. Postal summarized some of the recent findings. LIMRA’s Secure Retirement Institute study is called “Finding the Right Mix: LIMRA Retirement Income Attitudes and Preferences.” Both retirees and pre-retirees said that one of their top priorities is having enough money to last for as long as they live. Another top priority for more than 2/3 of those surveyed was to remain financially independent throughout their life.
Around half of the retirees and pre-retirees surveyed who had at least $100,000 saved said that they are interested in converting their assets into a guaranteed stream of lifetime income. LIMRA SRI found that the group most interested in converting their assets to lifetime income was young Baby Boomers aged 50-59 with $100,000-$499,000 in assets who have not yet retired. This group of Americans is less likely to have a defined benefit plan than any group that came before them. They are searching for a product that will help them convert their assets into a stream of retirement income. LIMRA SRI’s associate managing director said that the guaranteed income from an annuity product is a good way to help this group of Americans meet their goals of remaining financially independent by converting their assets into a lifetime income stream.
It seems like a no brainer that Americans would look at annuities to meet their retirement goals, but many don’t even consider them when planning for retirement. LIMRA SRI asked in their survey why people do not prioritize guaranteed lifetime income from annuities in their planning. Some responded that they are concerned that the guaranteed income won’t keep up with the inflation rate. Others are worried about low rates of return if they purchase a fixed annuity now. One of the other concerns that was mentioned was a lack of trust in the insurance companies offering the guarantees. Unfortunately for the annuity industry, many annuity concerns are actually based on misconceptions and just simply not enough knowledge about how annuities actually work. LIMRA SRI encourages both advisors and insurance companies to help educate consumers about annuity benefits. They said that their studies show very positive attitudes about annuities from consumers who have a high level of knowledge about the products.
CBS recently found that many Americans are struggling to save for retirement and pay their bills at the same time. More than 60% of Americans surveyed are worried that they don’t have enough saved for their retirement and over 40% don’t think that they will be financially ready to retire when they want to. Coincidentally, The Brookings Institution released study results showing that guaranteed lifetime income annuities, or Qualified Longevity Annuity Contracts, play an important part in making sure that retirees don’t outlive their retirement savings. The government agrees, because they just made it easier to use QLAC’s in workplace retirement plans and target-date funds. Annuity products meet many of the goals that consumers set for themselves. With the right knowledge about how annuities work and what products can meet what goals, consumers can be confident that their assets will carry them throughout retirement.