Jackson National’s first combined research report with IRI, “The Language of Retirement,” is a study of financial consultants and consumers. It aims to gauge how Americans of various ages evaluate their financial preparedness for retirement, their familiarity with and viewpoints toward various financial products, and the financial strategies they’re most likely to employ as they prepare for and enter retirement.
The research evaluated whether consumers and advisors fully understand annuities and their features, and whether annuities are perceived to be too expensive. The results showed that consumers view the concepts of annuities quite favorably – they understand their utility, as well as the need to rely on their savings for supplemental income, and they are willing to pay for income certainty and the financial confidence offered by the insurance guarantee. Advisors believe annuities have greatly benefited their clients, and many think they are extremely important for consumers’ retirement.
The challenges for the retirement industry, and for consumers themselves, largely rest in the biases against annuities, the language used to describe them, and a limited understanding of the modern annuity product and the benefits it can provide. Consequently, consumers are currently more likely to say they like and value what an annuity can provide than they are to say they like annuities themselves, or that they plan to purchase one.
Two of the report’s findings:
- More than 8 in 10 advisors say that guaranteed lifetime withdrawal benefits have had a positive impact for their clients.
- Eight in 10 consumers say they would purchase an investment product providing lifetime guaranteed income, even if it cost more than the alternative.
