When LIMRA Secure Retirement Institute released its 2014 annuity sales figures, income annuities — fixed immediate and deferred income — both achieved record sales despite a decrease in interest rates during the year.
Declining rates usually hold down sales of interest-sensitive products such as income annuities, so record-high sales defies typical market behavior. LIMRA Secure Retirement Institute research suggests that the growing trend of retirees and pre-retirees seeking guaranteed income could be a contributing factor.
As of 2011, 42.5 million Americans were retired and pre-retirees (age 55 and older) numbered 33 million. By 2025, 64 million Americans will be retired, with Gen X and Gen Y following close behind assuring that retirement and the pursuit of an income in retirement is a long-term trend.
LIMRA Secure Retirement Institute research consistently shows Americans’ top financial goal is to have enough money to last through their retirement. In the past, Americans counted on the “three legged stool” for retirement income: Social Security benefits, pension proceeds and personal savings. Right now, only 30 percent of pre-retirees have access to a traditional defined benefit (DB) pension plan. For younger workers, access to pensions is disappearing.