Product Changes Spur Variable Annuity Sales
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An annuity comes in many forms, but a simple definition is that an annuity is a contract that converts a sum of money into a series of periodic payments for an agreed upon period of time. An annuity can be thought of as a financial vehicle that converts a pool of money into a stream of income. Annuities are most useful in addressing the financial planning needs of people in or approaching retirement. Annuities are unique in the financial world because they can provide protection against the risk or outliving one’s assets (longevity risk) by guaranteeing income payments in perpetuity or any other selected amount of time. Annuities can be viewed as a type of personal pension plan. Social Security is similar to an annuity in that money contributed over the course of one’s working years is converted into a series of periodic payments that provide income during retirement.
The odds of financial success in retirement for the typical American household are less than ten percent.
This is based on the financial profile of an American household that would be considered statistically average. We developed the financial profile of an average American retiree in a previous article (click here to read).
The summary of the financial profile of our hypothetical retiree--referred to as William--is as follows:
There is a case to be made for home equity as the most important source of retirement funding in the United States, and this would seem to make the...
Putnam Investments President and CEO Robert Reynolds spoke on the need to address America’s lifetime income challenge at the recent Retirement Income Industry Association (RIIA) conference in Chicago.
While Reynolds has spent most of his career in leadership positions in the investment management industry, his...