In recent years, numerous studies have shown that Americans have significantly fallen behind with saving for their retirement. The financial fallout from the recent recession and the low interest rates that have prevailed have been contributing factors. Now, most realize the need to save; however, there is still a disconnect between recognizing this shortfall and acting upon that knowledge by re-starting a retirement savings program. This creates an opportunity for annuity issuers.
The amount of stress consumers feel about their retirements in general is going up. Thirty-seven percent of people say they are more worried now about either the possibility of outliving the money they've saved or having to cut back on their retirement plans, according to the latest Retirement Income Strategies and Expectations survey from Franklin Templeton. Slightly more than two-thirds of respondents say that in response to these worries, they are willing to make financial sacrifices today so that their retirement can be more secure.
Despite those vows, though, 30 percent of those polled say they haven't even started saving for retirement, and nearly seven in 10 of respondents aged 45 to 54 say they have $100,000 or less saved for retirement, the report said. Another one-half of those aged 55 to 64 - those closest to retirement - are also under the $100,000 savings threshold.
"The findings reveal that the pressures of saving for retirement are felt much earlier than you might expect," said Michael Doshier, vice president of Retirement Marketing for Franklin Templeton Investments. "Some people begin feeling the weight of affording retirement as early as 30 years before they reach that phase of their life. Very telling, those who have never worked with a financial advisor are more than three times as likely to indicate a significant degree of stress and anxiety about their retirement savings as those who currently work with an advisor."
As a result of many people now considering their retirement options, insurers should highlight the benefits that annuities provide for retirement – tax deferred growth and guaranteed income. Annuities can be used to save for retirement and they provide tax deferred growth. Immediate or pay-out annuities provide guaranteed income for the retiree's lifetime.