A recent study by LIMRA Secure Retirement Institute has revealed another reason to consider annuities in retirement planning — they provide a boost of confidence. When asked about their confidence in living a desired retirement lifestyle, 47 percent of retirees and pre-retirees who own annuities said annuity ownership contributed to their feeling of confidence.
LIMRA Secure Retirement Institute surveyed retirees and pre-retirees with at least $100,000 in financial assets. The top three factors contributing to their confidence include:
- Confident in my ability to manage finances 62%
- Expect to live modestly in retirement 59 %
- Have saved enough for retirement 53%
When asked about their most important goals for retirement, 71 percent of the participants in the study said they want to have enough money to last their lifetime and 64 percent said they want to remain financially independent. Stocks and bonds are the traditional investments for growth and security but as various surveys have reported, consumers fear a big drop in the stock market at the time of retirement could decimate their savings. With prolonged low interest returns on bonds, that option becomes less attractive even as a conservative investment. Many of today's annuities are designed to provide growth and security for retirement income.
We know from previous LIMRA Secure Retirement Institute research that more than half of people who work with an advisor say they are confident about their retirement. Financial professionals are in a position to educate their clients and clear up the misconceptions about annuities. Suggesting the right annuity product can help clients meet their retirement income goals and it might even give them a boost of confidence.