The famed 18th-century Scottish poet Robert Burns once said, “There is no such uncertainty as a sure thing.”
Burns must not have been familiar with annuities.
There is no uncertainty with the guaranteed lifetime income from annuities – it’s a sure thing. That’s one reason why annuity sales are soaring and why life insurers paid out a record amount of annuity benefits last year.
The new Fact Book from the American Council of Life Insurers (ACLI) reveals that life insurers in 2023 paid out $104 billion in annuity benefits, a 9 percent increase over benefits paid in 2022.
Most private-sector workers no longer have access to a traditional pension. So more people seeking their own source of steady, reliable income in retirement are turning to annuities.
Regardless of how long one lives, a lifetime annuity keeps on paying, supplementing Social Security and helping reduce reliance on the government for financial assistance.
More than 11,000 Americans are turning 65-years-old every day. Many could live for decades longer in retirement. According to the U.S. Census Bureau, the number of Americans ages 100 and older is projected to more than quadruple over the next three decades, from an estimated 101,000 in 2024 to about 422,000 in 2054.
Considering the volatile nature of the stock market and the economy, it’s not surprising that Americans are planning ahead and seeking out the stable, secure income from annuities.
The Fact Book data on annuities dovetails with new research by retirement experts Mark Warshawsky and Gaobo Pang. Their report concludes that retirees who fully or partially annuitize their retirement savings fare better in retirement outcomes than those who opt for the traditional strategy of annual withdrawals of 4 percent. In fact, people retiring with savings of $250,000 or less would benefit most from annuitizing higher portions of their retirement savings, if not all of it.
In addition to data on annuities, the new ACLI Fact Book includes statistics on life insurance and other industry products that Americans are increasingly turning to for financial security. For example, life insurance purchases and in-force coverage increased to record levels in 2023.
In this time of economic uncertainty, life insurers are playing a key role in the private-sector safety net. We provide the tools people need to secure their families’ financial future. Life insurers bring certainty to an uncertain world.
David Chavern is President and CEO of the American Council of Life Insurers (ACLI) whose mission is to provide financial certainty to Americans regardless of where and how they work, their life stage, or the economic status of their household. ACLI’s 275 member companies represent 93 percent of industry assets and provide financial security products and services to 90 million families.
