Annuities, once confusing to many, even suspect to some, are showing new life.
As more people worry about the finances of retirement, the concept of a guaranteed income stream for life, once available to many U.S. workers through employer pension payments, looks like a vital component of their portfolios.
“The people we hear from express a desire for an income stream protected from market volatility, which can be addressed through some types of annuities,” said Charlie Nelson, president of retirement services for Great-West Life. “People don’t want to be caught, as many were in 2008, with 401(k) losses that cause them to work another five years."
A May 2012 survey of 500 large U.S. employers found that 16 percent already offer their employees a 401(k) option for a retirement income stream, rather than just a lump sum. Another 22 percent plan to offer their workers such an option this year, the survey found.
In addition, more than 90 percent of workers in their 20s, 30s and 40s want access to guaranteed income through their 401(k)s, according to a 2012 study by The Hartford.
Some of the big insurance and mutual fund companies that offer 401(k) and IRA accounts are on board (Prudential, UBS, Vanguard and Fidelity), as are big plan administrators (Mercer, Hartford, Aon Hewitt and Great-West.)Page 1 of 5 | Next Page