The Role of Annuities in Retirement Planning
Broker World (05/03) p.50; Sharpe, Matthew

Annuities have become an important part of retirement planning, but their growth is hindered by lack of awareness and misunderstanding, this opinion piece says. Retirement assets are under pressure, interest rates are low, and investor faith is suffering while the number of retirees grows. The National Association for Variable Annuities reports that people expect to live longer and will likely live at least 13 years in retirement, and in a study found that most do not have the knowledge they need to save for retirement, nor do they know how much they need to save. The attitude toward retirement savings is accumulation rather than distribution and preservation, the commentary says. Fixed annuities provide guaranteed returns and tax-deferred growth, variable annuities offer equity investment and tax-deferred growth, and annuities can turn a sum of money into a guaranteed income stream. Providers should explain the value of annuities to clients.


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