Eighty-three percent of investors between the ages of 55 and 70 who are working with a fee-based adviser believe its more important for them to generate guaranteed income for retirees than to deliver above-average returns,
Additionally, 97% said protecting against market volatility is the most critical role that advisers can play today, and 86% said they would be interested in a product with monthly guarantees for life.
However, few investors own annuities or understand annuities, Fidelity said, showing tremendous room for growth of the industry. Fifty-seven percent claimed to understand annuities, but only 20% could correctly identify the accurate definition of an annuity. In addition, only 35% said they understand how an annuity can guarantee against stock market losses, only 33% are knowledgeable about the costs and fees associated with annuities, and only 20% knew that it is possible to exchange one annuity for another.
Declining pensions, rising healthcare costs and greater longevity are requiring investors to personally save more for retirement, yet unprecedented market volatility continues to threaten the personal savings individuals have, said Joan Bloom, executive vice president at
This makes it even more important for older Americans to work with their advisers to understand, and consider, all of their retirement income options, including annuities, Bloom added, noting that while the creation of additional riders in recent years have complicated many of these products, there are simplified, low-cost annuities available.
To help financial advisers who may not be familiar with annuities, Fidelity created the
