There are 3 trending waves in this country
that are causing annuity sales records to be broken
Factor # 1 / The Aging Trend :
According to the Department of Health and Human Services, there were :
39.6 million Americans over the age of 65 in 2009.
IN 2030, there will be 72.1 million above the age of 65 (nearly
double the 2009 number).
Simple math can extrapolate that figure to "new 65 year olds" in ths country at a rate of :
1,500,000 each year (or)
125,000 each month (or)
4,166 each day...
For retirees and pre-retirees who prefer to not go back to work again, principal protected financial products such as annuities are extremely attractive.
Factor # 2 / The "Disappearance of Interest Rates" Trend :
Interest Rates are in the gutter, still, and we may be in the midst of the
Japanese Tsunami. It is well known that Japan has had
almost 20 years now of 0% interest rates and
we could well be on this course as well.
Lifetime Income plans have been designed by annuity
carriers to ameliorate this condition, by providing annuity
plans that allow consumers to start a lifetime income at a
point of their own choosing. Consumers must to pay an
annual income rider fee that will guarantee them this set
amount of future lifetime income.
This product feature, although confusing to the public at large, remains the largest driver of current annuity sales.
Factor # 3 / The Market Uncertainty Trend :
Many retirees are scared of the market, despite its gains over the past 5 to 7 years.
Many Americans prefer to no longer subject themselves to the 30% to 40%
market declines they have experienced in 2001 and 2007. There has
been a steady erosion in market confidence amongst the populace.
Evidence of this phenomenon can be found not only in the
increased sales of annuity products, but in the interesting
phenomena of advice
and encouragement on the AARP website that is encouraging
seniors to keep working.
Yes, it seems that we have really swallowed some bitter pills over the last decade and the consensus for many now is to simply "put off" retirement.
What seems to be happening in this country is a "cut your losses" approach to retirement;
1) reduce market risk (buy annuities),
2) keep working, and
3) dimish your living costs.
It is the Perfect Storm for Annuties in 2014 !
But just make sure you understand them first !