Insight: Household Savings and Level of Retirement Investors’ Interest in Immediate Annuities

By Paul Secunda

Insight Overview


When considering differences in consumer behavior and decision-making with regard to annuities, the amount of savings that retirement investors have determines to some extent their preference for annuities. Both the wealthiest and the least wealthy investors recognize the value of having some annuity investments in their retirement portfolios. Both these
groups seem to prefer annuitization of one-quarter of their retirement savings over annuitization of one-half or more of their savings. The middle group appears to prefer no annuitization at all presently, which helps explain the current low demand in the United States for annuity products. Annuity manufacturers, annuity distributors, and financial professionals can help retirement investors by better framing the use of annuities as part of an effective retirement approach.

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About the Author

Paul Secunda is a Partner at Walcheske & Luzi, LLC, in Milwaukee, Wisconsin, where he practices employee benefits and labor law. He is a member of the American College of Employee Benefits Counsel, former Chairman of the ERISA Advisory Council, and has written numerous books, chapters, and articles on retirement security issues.

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