Worry of Waning Retirement Income Big Reason for Annuity Purchases: Study

In fact, 40% of preretirees and 53% of workers ages 40–54 expect their primary source of income to be from their 401(k), IRA and other savings. But there's a hitch: those income sources aren't guaranteed for life, as are Social Security and pension income. And that leaves younger people with a dilemma: how to make their money last.

"Our research consistently shows consumers are worried about running out of money in retirement—67 percent of preretirees list having enough money throughout retirement as their top financial goal," Jafor Iqbal, assistant vice president, LIMRA SRI, is quoted saying.

Iqbal also points out, "While these savings platforms are good solutions for accumulating assets, they often do not offer a way to create guaranteed income that retirees say they want and need"—something that annuities do.

He explains: "Annuities are fundamentally unique investment products, offering some combination of guarantees—guaranteed income that investors cannot outlive, protection of principal from market volatility, or guaranteed death benefits for beneficiaries."

Those guarantees can make a difference in peace of mind for workers looking to retire with a more secure form of retirement income, as Iqbal adds: "Our research shows seven in 10 retired annuity owners are more confident that they are more likely to afford their preferred retirement lifestyles—even if they live to age 90 or older."

— Related on ThinkAdvisor:

• Which Annuity Provides the Most Retirement Income? It Depends
• Women Have a Big Retirement Savings Problem: Prudential