A bright eye in a dark blue face (Image: Allison Bell/ALM)

Education may have more of a bearing on who in the United States ends up owning annuities than income does.

Managers of the Longevity Project-Morning Consult Poll have reported data supporting that idea in a collection of results from an online survey of U.S. adults that was conducted in late 2019.

Resources

  • A link to a Longevity Project – Morning Consult poll page is available here.
  • An article about Fidelity’s bank CD-annuity literacy gap survey is available here.

Palisades Media Ventures, a Washington-based company that sets up thought leadership campaigns, organized the Longevity Project together with support from partners such as Principal Financial Group Inc., Wells Fargo-Wealth & Investment Management, Instructure, and Morning Consult.

The list of partners also includes the Stanford Center on Longevity, the Urban Institute, the National Academy of Medicine, and the Milken Institute Center for the Future of Aging.

Ken Stern, the project chair, said Friday, at a press conference in New York, that the goal of the project is to help society grapple with the fact that the average lifespan of people in countries like the United States has doubled in the past 150 years, and that people are much more likely to live to age 100.

The Survey

The survey team has asked many general questions about attitudes toward longevity and retirement planning.

The team found, for example, that 63% of the 2,200 people who answered one set of questions said they are likely to live longer than their parents, and that 59% support the idea of requiring employers to offer 401(k) plans.

When the team asked, “Which of the following careers will be obsolete, or not as important, in the future?”, just 4% predicted that information technology careers would be less important, and 15% predicted that content creation would be less important.

The team has also posted detailed data on what 989 survey participants said about retirement instrument ownership.

About 12% of those 989 participants said they own annuities.

That result appears to be compatible with the results from the 2019 Insurance Barometer Report, which was released by Life Happens and LIMRA: Those groups found that 12% of the 2,000 U.S. adult household financial decision makers they polled reported having annuities.

The Annuity Data Crosstabs

The Longevity Project team has published two sets of detailed data crosstabs. The first data crosstab breaks down annuity ownership responses. The crosstab shows that older survey participants were, naturally, more likely to report owning annuities than younger participants were, and that retired participants were especially likely to report owning annuities.

About 21% of the retired participants said they owned annuities.

The team also found that annuity ownership correlated in a more obvious way with education levels than with income.

Income: About 16% of the people with income from $50,000 to $100,000 said they owned annuities, but only 14% of the people with income over $100,000 said they owned annuities.

Education: When the survey team broke results down by education, they found that the reported annuity ownership rate was 8% for the participants with less than a bachelor’s degree, 15% for the participants who had bachelor’s degrees; and 19% for the participants who had gone to grad school.

Attitude About How the Country Is Doing: Belief in whether the country is going in the right direction or the wrong direction also correlated with annuity ownership. About 16% of the people who said the country is going in the right direction reported owning annuities. Only 8% of the people who said the country is going in the wrong direction reported owning annuities.

Sri Reddy, an executive with Principal Financial, said in an interview after the press conference that he thinks one problem with conducting retirement-related surveys is that many consumers are unfamiliar with common retirement product terms, such as “annuity.”

The Secure Act will require retirement plan sponsors to provide illustrations showing participants how much lifetime income their accounts might produce, and those illustrations could increase consumer awareness of the idea of using annuities to insure their income, Reddy said.

— Read Fidelity Measures the CD-Annuity Literacy Gapon ThinkAdvisor.

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