Annuities have had a good 12 months and it is starting to seem like they are entering a golden age. Not only are the country’s demographics trending in favor of annuities, but the last year’s volatility and the recent rule change allowing annuities into 401(k)s are big tailwinds. Another big trend which helps is that since more and more companies are opting to offer 401(k) programs instead of DB plans, then people are ever more in need of guaranteed income. According to AIG, “It’s less about the vehicle. More plan sponsors and participants need to get comfortable with the creation of income … The only way to get guaranteed income is to annuitize retirement benefits. The question then is will annuities be offered in-plan or out-of-plan”.
FINSUM: The market and regulatory context are becoming better and better for utilizing annuities for clients. It might be time to think about these options if you aren’t already.