Tuesday, August 19, 2014
Annuities can be a beneficial retirement planning tool for avoiding the problem of the retiree running out of savings during retirement. However, annuities are not the focus for many senior citizens. Here are eight reasons annuities may be being underutilized.
- Annuities are often not part of the planning discussion with advisers
- Fear drives sales, and living longer than expected is not as scary as death
- Many retirees do not think their odds are good for outliving their retirement
- The possibility of high returns from gambling in the stock market instead is tempting
- The lower monthly payouts for women are discouraging, even though women will likely collect more checks as they have a longer life expectancy
- The sticker shock for couples’ annuities can be discouraging if the benefits are not fully understood
- The desire to have more assets to pass to the next generation rather than invest it all in an annuity
- It is necessary, but unpleasant, to consider living in severe poverty in order to plan against it
See, Eight Reasons Retirees Don’t Buy Annuities, Forbes.