Did You Know?
- That, as of the first quarter 2011, the combined net assets of U.S. variable annuities were valued at nearly $1.6 trillion, an 11% increase from first quarter 2010 and the highest level ever recorded?
- In 2010 fixed annuity assets were valued at $659 billion a 6% increase from 2009?
- That in 2010, the total average expense difference between variable annuities and mutual funds was 1.01%?
- In 2011, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401(k) and $200,000 plus for a non-qualified annuity?
- That the average number of funds per variable annuity contract was 50 in 2010, of which 47% of assets were invested in equities, 11% in bonds, and 20% in fixed-rate accounts?
- That the guaranteed lifetime withdrawal benefit was offered on 79% of variable annuities in 2011 and was elected by 65% of contract holders?
- Boomers who own annuities have a higher confidence in retirement expectations, with 92% believing they are doing a good job in preparing for retirement?
High-Level Professional Resources
Who Should Own an Annuity?
Annuities are appropriate for people with long-term investment horizons, who are saving for retirement and who have maxed out on their 401(k) or other qualified plan contributions and seek additional tax-deferred growth. They are also appropriate for people who want a guaranteed stream of income when they retire. A lot of qualified plans don't offer their participants this option - so if you want income you can't outlive, an annuity is an excellent choice.
Also, because they provide insurance guarantees that can protect valuable retirement assets from market downturns, such as the death benefit and optional living benefits, variable annuities can be a good choice for risk-adverse investors who wish to stay invested in the equity market where the highest returns historically have been.
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