U.S. income annuity shoppers are willing to pay more, and they seem to expect income needs to increase more than the Social Security cost-of-living adjustment rate, according to new annuity search data from Cannex Financial Exchanges.
Shoppers who looked for single-premium immediate annuities in the second quarter asked for prices with an average premium of $362,802, up 6.5% from the average recorded a year earlier.
The average starting annual income from the annuities in the searches increased to $55,350, from $45,823.
For deferred income annuity searchers, average premiums increased 5%, to $293,049. Average annual income rose 18%, to $55,350.
What it means: Income annuity shoppers and their advisors seem to think that their cost of living could go up about 6% in the coming year.
Details: The Cannex searches showed that the ratio of annual income per single premium payment would hold steady at about $12.60 per $100 of premiums for immediate annuities and increased about 13%, to $18.89 per $100, for deferred income annuities.
