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Investor study results about GLI products

Interest in Guaranteed Lifetime Income is on the rise with retirees and pre-retirees.

Do you know how important guaranteed lifetime income is to your clients? Do you know whether your clients understand how guaranteed lifetime income works?

The 2018 Guaranteed Lifetime Income Study from Greenwald & Associates and CANNEX interviewed over 1,000 consumers, ages 55-75, and reveals a wide range of concerns and opinions about how guaranteed lifetime income fits into their retirement strategies.

The Value of Guaranteed Lifetime Income (GLI)

“After age 50 it becomes more important to protect against investment loss.”

The study found the value that consumers put on guaranteed lifetime income has risen over the past year. 73% of survey participants see high value in GLI products as a supplement to Social Security income. The same survey a year ago measured 61%. Recent market volatility may be the reason for the uptick in consumer interest in GLI products. In fact, many agreed that after age 50 it becomes more important to protect against investment loss. 68% also say it is important for them to know that their essential expenses (such as food, clothing, housing) could be covered by an income source that is guaranteed for life. However, interest in a GLI product drops when it is labeled as an “annuity.”

The “annuity” stigma

While consumers show a high level of interest in the idea of “guaranteed lifetime income” – 32% of those consumers had lower interest when the product was labeled as an “annuity.” The top reasons for their lower interest were: not understanding annuities, perceived higher costs or too many fees, and concern about a lack of access to their money.

Top positive attributes about GLI products

Still – the positive beliefs about GLI products outweigh the negative “annuities” sentiment. 63% of consumers who own a GLI product are highly satisfied with that ownership – stating “protection against longevity risks” as the top reason. Other reasons include: offering reliability, protection against market downturns, and comfort in having an additional source of lifetime income besides Social Security.

Confidence vs. concerns in retirement

Understandably, the more retirement assets a consumer has, the more confident they are about their financial outlook. However, those who own a GLI product are more confident than those without (63% vs. 51%) – especially when considering the prospect of living beyond their life expectancy age (85+ years of age for both men and women). Consumers also expect that their highest expenses will come in the late stages of retirement. The top financial retirement concerns of respondents were: affording long-term care (34%) and the impact of stock market downturns on retirement savings (33%).

Role of the financial professional for GLI products

There is a great opportunity for financial professionals to discuss guaranteed lifetime income solutions with their clients – especially if paired with the subject of Social Security shortfalls for replacing pre-retirement income. This survey reveals that only 40% of consumers have discussed retirement income strategies with a financial professional. Furthermore, only 50% of consumers WITH a financial professional have discussed retirement income strategies with them. Those who have actually discussed retirement income strategies, or currently own GLI products, have a more favorable assessment of their financial professional.

See the 2018 Guaranteed Lifetime Income Study from Greenwald & Associates and CANNEX.

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