After the drop in the market over the past several years, seniors are looking more than ever for products providing safety of principal. This aspect, along with guaranteed returns and the numerous settlement options available, provide great appeal. Most annuity holders now say they are drawn to annuities for two reasons:
- Annuities provide guaranteed payouts over time as a complement to Social Security benefits and other retirement options; and
- Annuities offer the ability to invest in the market without the downside risk through living benefit riders.
"Whereas in the past financial planners were selling annuities for their tax-deferral advantages, now the importance of regular income in retirement is the leading draw to annuities," writes Samiya Edwards in Wealth and Retirement Planner (November-December 2004). "We're seeing 70 percent, 80 percent, and sometimes even 90 percent of annuities sold coming with some sort of these living benefits. Annuities are a secure and easy way to plan for the future and insure clients that they won't outlive their money. With an annuity 100 percent of a client's money goes to work immediately, annuities are protected from creditors and lawsuits, offering a safe harbor from stock market volatility, yet providing above-average growth and bypassing probate when the funds go to a named beneficiary."
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