Immediate Annuity Shoppers Look for 13% More Income: Cannex
The increase in the private retirement income target is much larger than the 2023 Social Security COLA.
U.S. residents who were shopping for immediate annuities in the third quarter were looking for 13% more income than they were when they conducted similar searches in the third quarter of 2021.
Although the average income sought increased 13%, the average proposed premium increased just 5.2% from the average figure included in the queries processed in the third quarter of 2021.
Cannex Financial Exchanges, a Toronto-based company annuity and bank product data provider, has published data on how much retirement income consumers want to buy for themselves in an analysis of its own income annuity quote search records.
What It Means
The Social Security Administration recently set the Social Security benefits cost-of-living adjustment for 2023 at 8.7%.
The 13% income increase in the average Cannex immediate annuity search might be a sign that typical clients and their advisors expect post-retirement income needs to go up by considerably more than 8.7% next year.
The Cannex Data
Retirees can use immediate annuities to create income streams that start within a year after purchase, and they can use deferred income annuities to schedule income streams to start at a later date.
Cannex helps consumers with both types of income annuity quotes and compiles summary data for both types of queries.
The Numbers
The average consumer who sought Cannex quotes for an immediate annuity in the latest quarter was 68.4 years old, hoped to produce $44,720 in annual income, and proposed paying $372,405 for an annuity, according to Cannex.
The average income starting date was 2.1 months in the future.
In the third quarter of 2021, the typical immediate annuity shopper was 68.6 years old, hoped to produce $39,526 in annual income, and proposed paying $354,158.
The average income starting date was 1.9 months in the future.
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