Guaranteeing Income for Life: A Priority for Retirement Savers
If the global pandemic and several iterations of the virus has taught us anything, it is that life is completely unpredictable. People are searching for ways to ensure stability, and that translates to their personal finances. That’s why it is no surprise that more and more savers are turning to annuities to ensure they don’t outlive their retirement savings.
In 2021, annuity sales jumped 16 percent to $254.8 billion, which according to the Secure Retirement Institute (SRI), represents the highest annual annuity sales since 2008. The Institute credits strong equity market gains, lower volatility and rising interest rates as contributing factors.
The numbers related to annuity sales tell an important story: that consumers are utilizing lifetime income products to fulfill their financial needs. The ability to customize an annuity to achieve specific goals is an attractive component. The choices among annuity products and features provide options that speak to consumers who want to be able to guarantee retirement income while crafting an arrangement that fits their needs.
Annuity sales were up across the board, with variable annuity sales up 27 percent from last year and fixed annuity sales up 7 percent. Registered index-linked annuities reached record sales of $39 billion in 2021, up 62 percent from 2020.
Lawmakers in the U.S. Congress also understand the value of guaranteed income and are exploring legislative proposals that make it easier to annuitize and provide greater flexibility when doing so. Several provisions within the Securing a Strong Retirement Act of 2021 and the Retirement Security and Savings Act seek to remove barriers to make annuities more available, improve the rules surrounding qualified longevity annuity contracts, and ensure spousal survival rights are protected.
As Americans rediscover how to live and work in the wake of COVID-19, guaranteeing savings that last throughout retirement is a fundamental component to a comprehensive savings strategy. In that regard, annuities help deliver peace of mind that has been hard to come by in the past several years.