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