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Annuities All the Rage in Retirement Planning

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Once considered an add-on product, annuities are now taking front and center stage in the mix of retirement income products, as people are seeking more certainty for their retirement income streams. In fact, 59 percent of Americans are worried about not having enough money for retirement.1

Interestingly, one strategy that is helping to allay concerns over retirement income, because of its ability to reduce the risk of volatility, is the purchase of annuities, and they are gaining popularity for that reason.

“Annuities can play a critical role in helping investors not only invest for retirement, but also insure for retirement by providing opportunities for growth and guaranteed lifetime income2,” says Elizabeth Forget, executive vice president, MetLife Retail Retirement & Wealth Solutions.

Research also shows that people who purchase annuities tend to experience more satisfaction during retirement. According to a September 2012 Towers Watson report titled “Annuities and Retirement Happiness,” the happiest retirees are those who receive lifetime income from their annuities.

The growing desire for income-focused retirement strategies is translating into growing annuity sales. Industry-wide annuity sales reached $229.4 billion in 2014, a 3.8 percent increase over 2013, and an 8.2 percent increase over 2012, according to the “Fixed Annuity Premium Study” published in March 2015 by the Insured Retirement Institute (IRI).

So, while annuities seem to be gaining in popularity, why aren’t they “selling themselves”? One reason is that potential clients often have concerns, one of which is that, while the guarantees provided by annuities can help hedge against market volatility few of them offer much in the way of flexibility.

FlexChoice,3 a guaranteed lifetime withdrawal benefit rider available with MetLife’s flagship variable annuities, can help address client concerns. FlexChoice helps provide clients with the confidence that they seek by offering guaranteed lifetime income with flexible features to adapt to changing circumstances.4

With FlexChoice, clients can start and stop withdrawing income at any time, and choose whether they want level payments for life or need more income early with a lower guarantee in later years. This gives clients more control over their retirement income.

FlexChoice is an especially attractive choice for married couples, because it provides the ability to receive income for one or two lives at no additional charge or reduction in initial withdrawal rates. And unique to FlexChoice is the fact that clients do not have to make the decision to cover their spouse at the time the contract is issued.5

All of these benefits place the control in the clients’ hands, allowing them to shape a balanced retirement income plan, so clients can retire on their terms and on their time.

“Life can unfold in unexpected ways,” says Forget. “Having a flexible financial plan that not only provides guaranteed lifetime income, but can also adapt to one’s needs as they change, is critical to help ensure a financially secure retirement.”

For more information on a variable annuity rider that offers this type of flexibility, go to https://flexchoice.metlife.com.

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1  Gallup survey, “Retirement Remains Americans’ Top Financial Worry,” April 22, 2014.
2  Guarantees are subject to product terms, exclusions and limitations, and the insurer’s claims-paying ability and financial strength.
3  FlexChoice is referred to as the Guaranteed Lifetime Withdrawal Benefit in the prospectus. Available for an additional annual fee of 1.20% of the Benefit Base. Upon Automatic Step-Up, the annual charge may increase, up to a maximum of 2.00%.
4  Provided your client stays within the provisions of the rider. See prospectus for details. 

5  The Joint Lifetime Guarantee Rate is only available for spouses and the rate for a single life is higher than the rate for joint life. The spouse cannot be more than 10 years younger than the oldest owner as determined by the birthdays of the two individuals. If a contract is jointly owned, the Joint Lifetime Guarantee Rate is only available for the spouse of the older owner.

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It is possible to lose money in a variable annuity even when an optional protection benefit is elected. The prospectus for a MetLife variable annuity issued by a MetLife insurance company is available from MetLife. The contract prospectus contains information about the contract’s features, risks, charges and expenses. Clients should read the prospectus and consider this information carefully before investing.

Availability and features may vary by state. MetLife variable annuities are long-term investments designed for retirement purposes and have limitations, exclusions, charges, termination provisions and terms for keeping them in force. The account value is subject to market fluctuations and investment risk so that, when withdrawn, it may be worth more or less than the purchase payments made. Variable annuities, other than Preference Premier®, are issued by MetLife Insurance Company USA, Charlotte, NC 28277 on Policy Form 8010 (11/00). The Preference Premier variable annuity is issued by Metropolitan Life Insurance Company; New York, NY 10166 on Policy Form PPS (07/01) and is offered through MetLife Securities, Inc. (member FINRA/SIPC). All variable products are distributed by MetLife Investors Distribution Company (member FINRA). All are MetLife companies. © 2015 MetLife, Inc. L0615428295[exp0716][All States.]