Advisor and consumer attitudes toward securing income in retirement

In March 2017, Jackson and the Insured Retirement Institute (IRI) surveyed both financial professionals and consumers on Americans’ preparedness for retirement, their familiarity with and their attitude toward various financial products and the financial strategies they are most likely to use. As the findings of the following survey reveal, consumers have an appetite for financial products that offer guaranteed1 lifetime income2 (usually for an additional charge), which can only be provided by annuities. In other words, while most consumers don’t realize it, annuities can help provide financial confidence by ensuring a steady stream of income that can last as long as they do.

If the retirement industry can overcome consumer bias toward annuities, simplify the language used to describe these products, and increase the overall understanding of the modern annuity and its potential benefits, advisors may find their clients to be more receptive, and potentially more successful at achieving their financial goals for the future.

Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.

1 Guarantees are backed by the claims-paying ability of the issuing insurance company.

2 Optional benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity. The long-term advantage of the optional benefits will vary with the terms of the benefit option, the investment performance of the variable investment options selected, and the length of time the annuity is owned. As a result, in some circumstances the cost of an option may exceed the actual benefit paid under that option.

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Investing involves risk, including possible loss of principal.

The opinions and forecasts expressed are those of the author and individuals quoted and should not be construed as a recommendation or as complete.

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