“It’s very consistent with what we are seeing. There is
greater and greater consumer concern about running
out of money in retirement and a growing interest in
guaranteed products.”
— Chad Tope
President, U.S. Annuity and Asset Sales Unit, ING
these needs of consumers,” Tope said. Given
the growing interest in annuities by both con-
sumers and advisors, few would argue with
Tope’s overall assessment: “It is a very good
time to be in the annuity business, and we
are excited to be able to help with consumer
concerns about a secure retirement.”•
producers that ING is doing business with
have a securities license; they are not just
insurance reps. His assessment is advisors
across the board are “embracing indexed
annuities as a safe asset class.”
According to Tope, the appeal of fixed an-
nuities is increasing, given today’s volatile
markets. Their goal isn’t to outpace the stock
market but rather to generate returns based
on interest rates and they are designed to be
complementary to VAs.
ANNUITY OWNERS
Somewhat or Strongly Agree
ANNU
DUE T
Source
63 The volatility in the financial markets makes me more likely
to consider an annuity
Fin
A
5
53 I would like to know more about features and benefits of my
annuity-based
investments
I
Certainty: This is all about managing things we know to be true
about the future. Americans face two certainties: People are living
longer and there will be market volatility.
Life expectancy in America has increased for both men and women. According to the Retirement Income Reference Book published by
the Life Insurance Marketing and Research Association, a 65-year-old
couple have a 50 percent chance that at least one of them will live to
age 89, or 24 years in retirement. Market volatility is also a certainty,
and the extreme volatility of recent years is increasingly the norm
rather than the exception.
To achieve a level of certainty, one strategy is to convert a portion of
assets that are exposed to volatile markets into a guaranteed-income
product such as an annuity that is backed by the claims-paying ability
of the issuer. This can help manage so-called sequence-of-return
risk, when market declines early in retirement shrink the years that
savings will last.
Millions of boomers are fewer than 10 years away from retirement
and are underprepared. While it will not provide a perfect roadmap
for everyone, the 4 C’s framework should help start the retirement-income planning conversation.
Unlike a diamond, retirement won’t last forever. But if you’re a
boomer who hasn’t started planning, retirement may end up feeling
like an eternity. •
Business Forum: Diamond-Quality Retirement Planning continued from page A4
To achieve a level of certainty, one
strategy is to convert a portion of assets
that are exposed to volatile markets into
a guaranteed-income product such as
an annuity that is backed by the claims-paying ability of the issuer.
Methodology: IRI partnered with Cogent Research to design a 10 minute
survey which was administered to investors who were responsible for making
household financial decisions and at least 25 years of age.
Data Collection Period: May 14 to May 31, 2012
Total (n=475); Annuity Owners: (n=246), Non-Annuity Owners: (n=229)
GUARANTEED INCOME STILL TOP OF MIND BUT INFLATION
IS A GROWING CONCERN DRIVING ANNUITY ADOPTION
Top 5 Reasons for Purchasing an Annuity
34%
27% 23%
9%
1%
35%
26%
19%
7% 6%
Guaranteed
income
Advisor
recommended
Principal
protection
Inflation
protection
2011 2012 49 I’m concerned that annuity providers cannot meet their
guaranteed
obligations
29 The public media have had a negative impact on my
impression of
annuities
Contact Information:
Cogent Research IRI
John Crosier Dan
jcrosier@CogentResearch.com dho
(617) 715-7640 (202
www.CogentResearch.com ww
NON-ANNUITY OWNERS
Somewhat or Strongly Agree
VERY
KNOW
Very
Article was previously published in the August 26, 2012 issue of the Star Tribune
http://www.startribune.com/business/167377735.html
Gary C. Bhojwani is chairman of Allianz Life Insurance Co. of North America, based in
Minneapolis, Minn., and is a member of the Board of Management of Allianz SE, Insurance USA
