The Social Security Debate Bodes Well For Annuity Sales
Seventy-six million baby boomers will begin retiring in about 2010, and in about 30 years, there will be nearly twice as many older Americans as there are today.
At the same time, the number of workers paying into Social Security per beneficiary will drop from 3.4 to 2.1. These changes will strain our retirement system. Benefit payments will begin to exceed taxes paid in 2015, and by 2037, Social Security will be able to pay only about 72% of benefits owed (see www.ssa.gov/pubs).
The prospect of retiring early may become nothing more than a dream for most Americans, and for some, retiring at all may be slipping out of grasp.
It is no wonder that baby boomers are now asking the question: What can I do to ensure that I wont outlive my money?
Annuities just might be their answer. Consider:
The concept of securing protection against the risk of outliving ones funds is not new. However, the increasing sophistication of investors suggests a need for more extensive asset allocation choices in order to meet the risk tolerances and return assumptions of a multitude of customers with varying life stages.
Based on risk tolerances and suitability, people should be changing their asset allocation approach all along their lifetime.
Annuities are well positioned to help meet that need, and for several reasons. Two of those reasons are tax deferral and annuitization, the cornerstones of the annuity success story. Other reasons are the asset allocation and choice of funds made available in variable annuities.