With 10,000 baby boomers retiring every day, it is a cohort that is looking for retirement and guaranteed income solutions, as well as yield products. The Insured Retirement Institute has seen increases on the variable annuities side, driven by the lifetime guaranteed withdrawal benefit that comes with those products, and increases in fixed annuity sales, driven by fixed indexed annuities, which don't generate interest rate risk. IRI's second quarter annuity sales report reflects industry-wide sales at the highest level in the past three years.
The steady growth of these sales has really been driven by the demographics, says Frank O'Connor, Vice President of Research for IRI, in search of products that will provide safety, a decent return and going to be part of that portfolio being constructed to provide guaranteed income in retirement.
In the qualified fixed annuity market, there was $12.5 billion in qualified sales and $11.8 billion in non-qualified sales. Most consumers that are going to have a large amount of investable assets will have them in 401k and other qualified plan arrangements so O'Connor says it's not surprising to see a lot of sales activity on the qualified side.
O'Connor thinks this type of growth will continue as the baby boomer generation continues to reach retirement, with a growing awareness of how much responsibility they have to take care of their retirement needs through the use of guaranteed income products,
Frank O'Connor, Vice President of Research at the Insured Retirement Institute. For more on their second quarter 2014 annuity sales report, click here. He spoke with Retirement News Today, providing online retirement news video content and is a featured network of Sequence Media Group.