Over one-third of retirees receive income from annuities, but for the majority, these instruments provide just 4% of their income, according to a report released Sept. 16 by LIMRA.
“The majority of current retirees relies primarily on pensions and Social Security to meet their daily expenses, with annuities making up only 4 percent of their income,” Jafor Iqbal, associate managing director of LIMRA Retirement Research, said in a press release.
Older retirees were most likely to receive income from an annuity. Almost half of those in their late 70s had an annuity, while just 19% of those under 65 did.
The study found that while household income has little effect on who receives annuity income, household assets are a strong indicator of who receives such income. The percentage of households with under $75,000 who rely on income from an annuity and those with more than $75,000 differed by just five percentage points.
When considering a household’s assets, 22% of those with less than $100,000 receive income from an annuity; 45% of those with between $250,000 and $499,000 receive income from an annuity. That number drops to 40% for those with more than $500,000.