The nation is now only two years away from the time when the oldest of the baby boomer generation hits age 62 and when some of them will be entering retirement.
Will the financial services industry be ready with products, programs, services and systems? Let’s call them PPSSs.
For the past few years, it’s been looking as if that wouldn’t happen. Many who watch the PPSS horizon have seen little evidence that the shakers and movers were shaking and moving in the boomer retirement direction.
There was lip service, of course, to the importance of addressing older boomer needs, their financial and longevity risks, and related matters. But only a few market leaders were also walking the walk.
What a difference 2005 has made. By year-end, buzz started circulating that income product sales were up (in particular, for immediate annuities and guaranteed withdrawal provisions in variable annuities). No one is talking double-digit increases, but they are talking rather respectable single-digit increases.
That buzz won’t be statistically verified until year-end results are in. But the scuttlebutt has it that companies and agencies that targeted the market produced more than blips.
Also during the year, a number of different wrinkles on income options started showing up in products.
Diversified Services Group Inc., Wayne, Pa., has reported that its 6th Annual Study of Retirement Income Products, Issues and Market Trends detected a “strong advance” in offerings of guaranteed living benefit options in VAs. That is telling, because these options are typically positioned for retirement income purposes. Significantly, nearly all executives interviewed by DSG said their GLB products had caused “dramatic increases” in their VA sales.
DSG doesn’t expect this trend will end any time soon, says James R. Sholder, DSG principal and leader of the study.
Why so? He cites “growing enthusiasm” for the products among executives interviewed for the study–and also a “robust pipeline” of such products now on the drawing boards at “numerous companies.”