Filed Under:Annuities, Fixed Indexed

8 facts (for advisors) about annuities and consumers

A recent survey by The Phoenix Companies revealed some great news for annuity advisors as well as disconnects for the safe product and consumers.

According to the survey, “71 percent of Americans said they would consider buying an annuity to meet a variety of needs, including predictable monthly income, leaving an inheritance for their heirs, assistance with chronic care expenses and asset accumulation opportunities.”

disconnect1. The Great Disconnect

“This survey confirmed statistically what we have heard anecdotally for years -- that the majority of Americans don’t have a deep understanding of today’s annuities,” said Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix’s distribution subsidiary. 

safety in numbers2. Safety in Retirement

When Americans were asked which benefits they would consider purchasing an annuity, about half (49 percent) indicated they would purchase one to secure a predictable source of monthly income for retirement.

income stream3. Converting Retirement Savings into an Income Stream

Conventional wisdom says that creating a dependable stream of income in retirement is a major challenge for pre-retirees and retirees. 

risks in retirement4. Risks in Retirement More than half (55 percent) of those surveyed said that they plan to use their savings as a supplement to their pension and/or Social Security only as needed. 

“When people say their savings will serve only as a supplement to a pension or Social Security, I consider it a signal that their savings will not be a significant source of income,” Fitzgerald said. 

withdraw money5. Withdraw, Withdraw, Withdraw

Another 50 percent plan to withdraw a set amount each month or year from an IRA or employer-sponsored retirement account, such as a 401(k). 

20 percent6. The 20 Percenters

Only 20 percent of consumers are planning to use an annuity, according to the survey.

financial advice7. Let Me Give You Some Advice

Despite the need for financial advice, only 36 percent of participants who have not yet retired said they either currently work with a financial professional to help plan for retirement or have done so in the past. 

confident retirement8. Confident in Retirement

The vast majority (85 percent) of non-retired participants who have ever worked with a financial professional said they were confident they would be able to convert their retirement savings into a predictable source of monthly income. 

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Nichole Morford

Nichole Morford
Managing Editor

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