New Study Shows Consumers Desire Guaranteed Lifetime Income, But They Don’t Know Where to Find It
Survey by
The study, conducted jointly by Jackson National Life Insurance Company® (Jackson®) and the
Despite the generally positive perceptions of the benefits of guaranteed lifetime income and the fact that 63 percent of advisors recommend annuities to their clients, only one in four respondents age 45 and up plan to purchase an annuity.
“This disconnect is devastating to American savers and the advisors who are trying to serve the best interests of their clients,” said
More than half of the financial professionals surveyed believe at least some of their clients who do not own annuities will run out of money during retirement. More strikingly, the study also found more than half of advisors had clients who managed to completely exhaust their financial resources — nearly one-third of the advisors have had this happen to three or more clients. The primary factors cited by the advisors for this were overspending and health care costs.
While annuities can help solve the prospect of diminishing savings, many advisors indicated there are specific challenges that limit the use of annuities. Of advisors who responded, 61 percent believe negative client perceptions of annuities present a barrier, and almost half of advisors say their clients believe annuities are too expensive. Yet when advisors described features of annuities in isolation — without referring to the products by name — consumers expressed strong interest.
“It’s more critical than ever that our industry overcomes the existing bias toward annuities, simplifies the language used to describe them and increases the overall understanding of the power of a well-structured modern annuity so Americans will be more receptive to using them to reach their financial goals,” said
Additional key highlights of the study include:
- Younger consumers express greater interest in the income features annuities provide compared to older respondents;
- Eight in 10 consumers say they do not believe
Social Security alone will provide them with sufficient income in retirement; - Only 21 percent of consumers expect a pension to provide them with significant retirement income;
- Four in 10 consumers believe their personal retirement savings will be their most significant source of retirement income; and
- Two-thirds of consumers believe it is very or somewhat likely that their retirement savings will be significantly affected by a health event.
“This study is a critical step toward understanding how future generations plan to save for retirement,” she said. “It is particularly alarming that the study found half of consumers plan to regularly withdraw money from their retirement savings to cover basic and discretionary spending, an approach that carries a high risk of depleting assets, especially among those who live longer.”
The Language of Retirement 2017: Advisor and Consumer Attitudes Toward Securing Income in Retirement 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. The online study, which was conducted between
About
Jackson is a leading provider of retirement products for industry professionals and their clients. The company offers a diverse range of products including variable, fixed and fixed index annuities designed for tax-efficient accumulation and distribution of retirement income for retail customers, and fixed income products for institutional investors. Jackson subsidiaries and affiliates provide specialized asset management and retail brokerage services. With
Jackson is the marketing name for
*Jackson has
Jackson National Life Insurance Company is an indirect subsidiary of
About the
The information in this press release is our summation of a study conducted on behalf of the
A variable annuity is a long-term, tax-deferred investment designed for retirement, involves 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 59 ½.
The latest income date allowed is age 95, which is the required age to annuitize or to take a lump sum. Optional benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity.
Variable annuities are issued by
1 Guarantees are backed by the claims-paying ability of the issuing insurance company. Guaranteed lifetime income is available through two different options, annuitization and optional living benefits. Please note that not all optional living benefits offer guaranteed lifetime income, are not available on all annuity products and may have an additional charge.
PR2951 08/17
View source version on businesswire.com: http://www.businesswire.com/news/home/20170912005531/en/
Jackson National Life Insurance Company
Phone: 303-224-7572
Email: [email protected]
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