Personal Finance: Record Annuities Sales Tempt New Investors

Not too long ago, if you mentioned the word "annuity" to investors, their eyes glazed over. But now individual investors, panicked by stock market selloffs that threaten their retirement dreams, have been doing something they have never done before: asking for them.

Paradoxically, they are looking for these retirement insurance products that come with guarantees at a time when many annuity payouts are puny, thanks to ultra-low interest rates.

Calculate My FREE Annuity Quote Now!



  • Optional: For a 2-person annuity (joint lives)

No agent will call you

Your privacy is guaranteed.
Find advanced calculator options here.

Get quick answers to your annuity questions: Call 800-872-6684 (9-5 EST)

"This year will indeed be a record-setting one for the industry," said Cathy Weatherford, president of the Insured Retirement Institute, an annuities trade group that is hyping its annual meeting with a "Get Ready for Boom Time!" call to members.

Sales of annuities hit $60.4 billion in the second quarter of 2011, up 10 percent from the second quarter of 2010, the group reported.

Savers have been investing in both variable annuities, which allow investors to choose underlying investments and are typically used to accumulate retirement savings, and fixed annuities, which offer a guaranteed, preset monthly payment for life and are typically bought during a person's retirement years.

While there's no data on how many annuities are "sold" because they are pushed by insurance agents and brokers, there's anecdotal evidence of increasing demand.

In one month, New York Life [NYLIN.UL] exceeded its annual sales goal for a new deferred fixed annuity it unveiled in mid-July. "Retirees and those near retirement are searching for ways to safeguard their nest eggs and increase their payouts. This is fueling a growing hunger for guaranteed income," a spokesman said.

For years, annuities got a bad rap for high fees, confusing choices and poor investment performance.

Testimonial Image
I was hesitant at first to buy an annuity on the internet. Once I got your quote report and read your reviews I was happy I found your website. Your phone reps were always very helpful. You made the whole thing go really simple. Thank you guys!
Joe Murphy
Read 200+ verified reviews

"For the most part, annuities have historically been oversold," said Sheryl Garrett, a Kansas City fee-only financial adviser. "Right now, they may be being overbought."

American investors now seem to care more about guarantees and security than they do about wealth, according to a July survey by SunAmerica Financial Group and demographic research firm Age Wave. Some 65 percent of investors said they want investments that are guaranteed not to lose value and 60 percent seek to protect their income from market loss.

But Garrett contends that many advis

We'd love to hear from you!

Please post your comment or question. It's completely safe – we never publish your email address.

Add a new comment:(Allowed tags: <b><i><br>)


Comments (0)