In 2017, Jackson® and the Insured Retirement Institute (IRI) conducted a study of advisors and consumers entitled “The Language of Retirement” where they sought to gauge how Americans evaluate their financial preparedness for retirement. Four hundred advisors were surveyed along with 1,300 consumers screened according to age and a minimum threshold of retirement savings. The results were surprising and illuminating. I’d like to share a few key takeaways I discovered through the results.

The New Retirement Reality

Retirement is changing in America—and with that change, a new retirement reality is emerging. Gone are the days when Americans counted on Social Security to support their retirement income needs. In fact, results revealed that eight out of ten people believe Social Security will not provide them sufficient income in retirement.1 Advisors also express concern about their clients’ retirement preparedness—and those concerns appear to be warranted. More than half of advisors believe at least some of their clients who don’t own annuities will run out of money during retirement and nearly one-third report having had three or more of their clients exhaust their investable assets.2

"Gone are the days when Americans counted on Social Security to support their retirement income needs."

Despite waning confidence in Social Security and persistent worries about running out of money in retirement, many consumers haven’t yet adapted their retirement planning approach. The study revealed that rather than opting for a protected lifetime income strategy,3 50 percent of consumers plan to withdraw savings as needed in retirement, instead. Given advisor concerns about clients outliving their money, this approach seems unsettling.

Annuities as a Source of Retirement Income

Americans used to turn to pensions to provide guaranteed income for life, but as Seth D. Harris pointed out in a recent article, they are increasingly becoming uncommon. Recent Labor Department data reveals that only one in ten U.S. workers is enrolled in a defined-benefit pension plan.4 That means the 90 percent of pension-less Americans who want a guaranteed lifetime income product will need a different approach.

Though no retirement product can fully mirror a defined-benefit pension plan, annuities with guaranteed minimum income benefits can provide steady retirement income similar to pension checks*†‡—a fact that many consumers are not aware of.

Despite relatively high awareness of annuities, the survey shows only one-third of respondents ages 25 to 34 understand that an annuity can provide lifetime income.6

Annuities are, of course, different from pensions—in part because of costs and savings risk—consumers buy and pay for annuities themselves while employers contribute to sponsor-defined benefit plans. Nevertheless, the IRI survey revealed that 80 percent of people say they would purchase an investment product providing guaranteed lifetime income, even if it cost more than an alternative.7 In addition, among respondents ages 35 to 44, three out of four people said they would be very or somewhat interested in a financial product providing guaranteed lifetime income—even if they were unable to access the principal investment.


From my perspective, annuities have long provided investors a way to pursue their financial goals while offering protection from outliving their money. Unfortunately, misinformation and complex explanations often make it difficult for consumers to make balanced and well-informed decisions. Take time to evaluate the research and decide for yourself.

Interested in reviewing the full study? Download the study and results here.


1 Insured Retirement Institute and Jackson, “The Language of Retirement,” June 2017.

2 Ibid.

3 Ibid.

5 CNN Money, “Ultimate Guide to Retirement,” June 2017.

6 Insured Retirement Institute and Jackson, “The Language of Retirement,” June 2017

7 Ibid.

*What is an annuity:

An annuity is a long-term, tax-deferred vehicles designed for retirement. Variable annuities may involve investment risk 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.

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

Optional benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity.

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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