American Equity understands your clients look to you to help them find the retirement solutions that are in their best interest. While every retirement is unique, we also believe many of today’s pre-retirees and retirees face the same concerns: preserving money, maintaining a lifestyle they enjoy and securing a lifelong income.
American Equity has created a six-part series, comprising monthly articles and infographics, addressing common retirement concerns.
Previously, we covered:
- Preservation, “The Key to Successful Income Preservation in Retirement”
- 5 P’s of Retirement Planning Infographic
This entry focuses on generating guaranteed income.
The Trouble With Retirement Is …
Abe Lemons, the outspoken college basketball coach, once quipped, “The trouble with retirement is you never get a day off.” This is perhaps more poignant now than ever. Today’s retirees are living longer and facing lengthier retirement. More than half (51%) of Americans retire between the ages of 61 and 651; meanwhile, the life expectancy of a 65-year-old today is 85.2 That means, on average, your clients today are looking at 20 to 24 years of retirement—many of them will live much longer. The number of Americans living 100 years or more is up 44% from 2000.3
Within the next five years, 11,000 Americans a day will reach retirement. The expansion of defined contribution plans and decline of defined benefit plans/pensions (often featuring lifelong benefits) over the past 20 years means that many of these people are looking for reliable retirement vehicles. As a result, the 2025 retirement market will top $25 trillion. 4
As this community grows, so does the demand for products that provide the benefits unique to fixed and fixed indexed annuities, such as guaranteed income.
However, the general retiring public remains unfamiliar with these products, or how they perform. In fact, according to The American College’s financial literacy surveys, nothing about annuities is clear to consumers. While your clients may understand the need for retirement income, they also want to understand how they can generate income.
5 Fixed Index Annuity Benefits Guaranteeing Income
To help lead the discussion about the benefits of these products with clients, we outlined five basic benefits of a fixed index annuity and how they produce guaranteed income.
1. Guaranteed Protection – When a client purchases an annuity, their premiums are guaranteed 100% protection from index volatility. This is especially important for risk-averse clients who are looking for reliable protection.