If you had asked me 10 years ago to guess the average issue age for indexed annuities, I would have likely guessed age 35. In reality, AnnuitySpecs.com’s Indexed Sales & Market Report for fourth-quarter 2011 indicates that the average age of indexed annuity purchasers today is 65. That’s a huge discrepancy, and unnecessarily so. Why don’t more young people buy annuities? So many of them suffered losses in 2008’s market collapse, and they are looking for alternatives to their current “retirement plans.” They also know that Social Security will be vastly different when they retire than it is now. So, why aren’t they buying products like indexed annuities?
Insurance agents’ remarks on the matter provide some insight. Frequently, many say they are “too young” to own an annuity.
So, I just have to ask, what makes someone “too young” to purchase an annuity? I was confused with the “too young” comment years ago and now that I am an insurance expert, I am even more confused.
Another retirement option
After all, a deferred annuity is just another retirement income accumulation vehicle. Is anyone too young for a certificate of deposit or bonds? Would you wait to propose a 401(k) to an individual until they were on the brink of retirement? You get my point. Deferred annuities are a tremendous tool for young savers who want the tax-advantaged benefits of annuities, in addition to an income that they cannot outlive. So, why aren’t they buying them? You tell me.