In years past, workers could count on monthly income from company pensions or retirement plans to provide retirement income. No longer. Present day retiring Baby Boomers are in search of that guaranteed income. Fixed annuities, simply said, are designed to guarantee income, offer peace of mind and provide protection. Nearly 90 percent of annuity owners buy them for just that; because they provide retirement savings and protect contract holders from losing money. No surprise then that sales of fixed annuities reached over $24 billion, an increase of almost 42% over the year-ago period.
Baby Boomer consumers demand protection and guaranteed income. Fixed annuities, simply stated are a protection mechanism, like life insurance. Fixed annuities are not an investment play and buyers are approaching annuities from the protection standpoint. Even in this season of low interest rates, fixed annuity sales numbers are the highest the industry has seen in five years. The National Association for Fixed Annuities (NAFA) recognizes that annuities have not been developed as an interest-rate tool. Fixed annuities, simply stated are meeting the consumers’ demand for protection and a guaranteed income. Enough said.
Cyril Tuohy has covered the financial services industry for more than 15 years. To read more about finance and fixed annuities, click here.