“In the past four or five years, there has been a tremendous increase in demand for guaranteed lifetime income,” says Bill Van Winkle of Van Winkle Associates, a financial planning firm in Tinton Falls, N.J. “With the specter of greater longevity, people are more concerned about outliving their income.”
The desire for guaranteed cash flow is evident in reports of higher sales of income annuities, which can provide a lifelong cash flow. According to Beacon Research, income annuity sales topped $11 billion last year, an increase of nearly 20% from 2012. Unfortunately, clients who buy an income annuity now are effectively locking in today’s low interest rates, which play a role in setting annuity payouts.
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