This is what Linda Koco, contributing editor of AnnuityNews, wrote in the article Annuities Vie With Mattress Money, based on an Allianz study on the use of annuities for retirement savings. She found that the tough economy is causing consumers to make some tough retirement savings choices between annuities, other retirement plans, investments and mattress money, according to survey findings.
When the study participants were asked to rate several factors related to creating a more secure retirement, 86 percent said “having a guaranteed stream of income in retirement.” And nearly half (47 percent) of non-retirees rated a guaranteed stream of income as the top retirement need they have yet to acquire in order to feel more secure.
What they are describing are the benefits of an annuity: guaranteed retirement income. However, only 8% of nonretirees said they own annuities, according to the study.
The survey results confirmed that Americans want more guarantees in retirement but simply don’t know what to do to create financial certainty. The takeaway here is that more education is clearly needed about annuities.
Additional numbers from the Allianz study show a startling retirement landscape.
- Only 18% have guarantees through a pension.
- Almost 40% of non-retired Americans indicate they own no retirement or investment products of any kind.
- 30 percent of nonretirees say they have either decreased the amount they are saving for retirement or have stopped saving altogether.
- 26 percent say they still have no idea what they need to acquire in order to feel their retirement will be secure.
- 28 percent said, “I wish I were more heavily invested in annuities than I am now.”
- 51 percent said the stock market’s recent volatility has now made them question whether retirement savings vehicles such as 401k, 403b, or 457 plans are adequate ways to save for retirement.
The bottom line: If you want a safe, secure guaranteed lifetime income in retirement, use annuities in your planning.