Annuity Awareness Month, Is your Clients’ Income Guaranteed? 

June marks the beginning of Annuity Awareness Month, and a great time to educate your clients on the benefits of annuities.

Annuities can be an integral part of your clients’ long-term retirement planning strategy, providing direction to help them overcome unnecessary risks and important optional benefits that help them to protect their financial future. Annuities offer guaranteed death benefits and payment options to help meet retirement income needs. A key step in planning for retirement is to put strategies in place that maximize guaranteed income.

Why Guaranteed Lifetime Income is Important

The fact is, Americans are living longer. There has been a significant increase in the life expectancy of 65-year-olds over the past quarter century. Today, the average life expectancy for a 65-year-old male is 84 and female is 86.51. This compares with 81 and 84 years respectively in 20002. While an increase of three or five years may not seem dramatic over a lifetime, it can have a significant impact on retirement security. Additionally, health care costs continue to rise. For the average 65-year-old, health care costs will be $280,000 over their retirement, further necessitating the need for lifetime income.(1)

Using guaranteed income sources to meet essential expenses helps address the issue of living longer. Furthermore, these income sources provide some assurance to your clients that they can cover basic needs such as housing, health care and food for as long as they live. The remainder of their assets can then be directed to investments with more growth potential to help protect against inflation, rising health care costs and market volatility. Consider these sources of guaranteed income:

  • Pension Plans - Many pre-retirees with poorly funded 401(k)s wish they had a traditional pension. But few workers still have access to a retirement plan that will provide guaranteed payments for the rest of their lives.
  • Social Security - Many retirees receive the largest portion of their guaranteed income from Social Security. Most people begin claiming Social Security at the earliest eligible age, 62, before reaching full retirement age.(1) However, if your clients can hold off on claiming benefits, the difference may be significant. Clients can increase Social Security retirement benefits by 25% or more by accumulating delayed retirement credits up until age 70. (4)
  • Annuities - Unless your client has enough guaranteed pension and Social Security benefits to cover all their basic expenses, they most likely will need to supplement their retirement income with savings.

Other investments generally don’t provide a guaranteed lifetime income. An annuity can turn assets into a steady, guaranteed* income stream. This means that no matter how long your clients live, they can always depend on this source of income.

A key step in planning for your retirement is to put strategies in place that help maximize your clients’ guaranteed income. 

*Guarantees based on the claims-paying ability of the issuing company.


Ron KuehnRon Kuehn
Ameritas Vice President of Annuity Product Development
Contact HERE