June is National Annuity Awareness Month, and it’s a great time to introduce and discuss the overall benefits of annuities with your clients.
Guaranteed income conversations take on added importance when discussing confidence among retirees regarding their savings. Given the tumultuous nature of the market the last two years and the uncertainty that lies ahead, many more of your clients may be interested in exploring risk control options with you.
But before we get into how annuities can benefit retirees, let’s look at what a recent survey found regarding confidence in retirement.
Current Thoughts About Income in Retirement
Data from the 2022 Employee Benefit Research Institute (EBRI) Retirement Confidence Survey emphasizes the importance of guaranteed income options in retirement. It also reflects peoples’ resilience in light of the pandemic and other recent events that sent markets and the economy on a rollercoaster ride.
About seven in 10 workers feel confident they’ll have enough money in retirement, while eight in 10 retirees feel the same way. Of note, however, is that only about one-third are “very confident” they will have a comfortable retirement.1
Individuals feeling less confident in both groups cited the ongoing pandemic as a major concern. In the wake of year two of the pandemic and other unprecedented events of this difficult period, the latest study also released these findings:1
- Only about one in three workers and retirees currently work with a financial advisor
- Almost half of retirees say they retired earlier than expected
- 65% of workers believe they have the means to cover medical expenses
- 65% think they’ll have enough money to last their lifetime
These survey results mean a significant number of people still don’t feel confident about their income in retirement. Given all the financial questions here, perhaps the most startling survey finding is this:
Only 34% of retirees say they have a source of guaranteed income for life.1
The fear of running out of money is real, but annuities may help provide the security that other investment options might not. While the majority of those who are already retired may not benefit from the guaranteed income that an annuity could bring, a little over half of workers expect a product that guarantees monthly income for life to be a source of income in retirement.1
These findings present major opportunities for workers to take advantage of financial products like annuities as they strategize for the future — and major opportunities for advisors to discuss these options with clients.
Teach Investors About the Benefits of Annuities
Here are some fast facts to help your clients better understand the capabilities and benefits of annuities:
- Fixed annuities offer steady rates of interest at a fixed amount as well as tax-deferred growth
- Registered index-linked annuities feature earned interest linked to market performance, up to a predetermined cap
- Variable index-linked annuities combine diversification with protection, offering customized, guaranteed limits on loss
- Income annuities can offer guaranteed lifetime income, and can help ensure that savings last as long as your client lives or through a chosen period of time
The better informed your clients are about annuities, the better they’ll feel about their future.
Use National Annuity Awareness Month in June as an opportunity to give your clients the facts they need about annuities and the power of risk control. Ahead of your conversations, we have resources about the different types of annuities available that you can browse. Click the link below to learn more.
