FIA sales soar as demographic case for guaranteed lifetime income grows

There's an enormous – and growing – group of consumers who can benefit from investment strategies that include lifetime income. There are more than 74 million Americans aged 55 and older, with 38 million over 65, according to the most recent data from the U.S. Census. However, just over one-fourth (27%) of baby boomers are confident their savings will last throughout their retirement years.

Consumer demand for guaranteed lifetime income remains strong for three main reasons. First, the number of those reaching prime retirement age is growing significantly; the Pew Research Center estimated that 10,000 Baby Boomers will turn 65 every day until 2030. Second, Insured Retirement Institute research shows two provisions – guaranteed monthly income and no risk of losing principal – are the most important traits of a retirement product. And third, people are living longer. The Society of Actuaries estimates that healthy 65-year-old men in the U.S. have a 50 percent chance of living to age 87, while women have a 50 percent chance of living to 89. A 65-year-old couple has a 50 percent chance that at least one spouse will live to 93.

The demographic case for lifetime income has never been more pronounced, according to Cathy Weatherford, IRI president and CEO. "There's a large cohort on the cusp of retirement," she said in a prepared statement. "These Americans will live longer in retirement than any generation before and will be more responsible for their financial security. This is a tremendous opportunity for the retirement income industry."