Annuity owners have higher levels of retirement confidence than those who do not own annuity, new research reveals.
The Insured Retirement Institute, Washington, D.C., published this finding in a new survey of Americans aged 50 to 66, the survey titled “Baby Boomers and Generation Xers: Are They on Track to Reach Their Retirement Goals?” IRI Commissioned Woelfel Research Inc., Fairfax, Va., to conduct the survey.
The report reveals that, among boomers who own an annuity, 53.4% are extremely or very confident they will have adequate income in retirement, compared with 31% who do not. Among Generation Xers who own an annuity, 49.4% are extremely or very confident, versus 31.2% who do not.
Annuity owners, the report adds, are more likely to engage in positive planning behaviors. Nearly 7 in 10 (69.6%) of boomers and 60.4% of Generation Xers completed a retirement savings need calculation. This compares with 44.3% of boomers and 34.0% of Generation Xers who do not own an annuity.
Likewise, more than 7 in 10 boomers (73.7%) and 6 in 10 (62.3%) Generation Xers who own an annuity consulted with a financial advisor. This compares with 34.8% of boomers and 29.7% of Generation Xers who do not own an annuity.
The report also reveals that 76.2% of all boomers and 78.2% of Generation Xers are “somewhat to extremely confident” that they will have enough money to live comfortably through their retirement years. But only half (51.4%) and boomers and 40.7% of Generation Xers have calculated how much they will need in retirement savings.
Just over 1 in 5 (21.6%) of boomers and 40.8% of Generation Xers have less than $50,000 saved for retirement. Comparable percentages of boomers (21.7%) and Generation Xers (27.8%) report that they have no savings for retirement.
Significant minorities of both generations (40.8% of boomers and 45.1% of Generation Xers) report they are “not very” or “not at all” knowledgeable about investing in securities.
Working with a financial advisor increases retirement confidence, the report notes. Among boomers who consulted with a financial advisor, 42.8% are “extremely confident” or “very confident,” compared with 32.3% of those who did not. Among Generation Xers who consulted a financial advisor, 47.6% are extremely or very confident, compared with 28.9% of those who did not.