3 Types of People Who Might Consider an Annuity

This group consists mainly of people who always have a plan in place. They are coordinated, disciplined, and value having a clear set of rules to help them stay on track. They:

• Thrive in paying attention to the details and are meticulous planners
• Are determined to take control of their finances and work hard to be able to enjoy an active retirement lifestyle
• Value being able to contribute to their family and leave behind a legacy

On average, Organized Planners have an annual income of $200,000 and investable assets of $1.3 million. Typically, they:

• Are naturally anxious and worry about having enough funds in retirement
• Prefer reliable and proven methods that offer more certainty
• Rely heavily on financial professionals for education and guidance

Our research found that annuities are listed as one of the top sources of income in retirement for 34% of Organized Planners, yet Social Security benefits are the primary source for them. Fifty-four percent of people in this group tend to stick with a product once they find one that they like – as tried and true options offer them more assurance of the best possible result.

Financial professionals can help clients of this group create and maintain concrete plans for retirement to help relieve them of many of their financial tensions. A balanced, low-risk plan may be the best approach for Organized Planners. Although many people in this group have a high number in mind for what they’ll need to retire, slow and steady is the preferred course of action for these clients.

This is a group of very realistic people who place living within their means at the forefront of their lives. They tend to fear the unknown, and therefore prioritize saving with a strong contingency plan in case of an emergency. They:

• Are natural leaders who believe they are the ones to acquire a safety net for their family
• Are driven individuals who want to ensure they’ll have enough money in retirement for basic needs as well as any unexpected expenses
• Often worry about the state of the economy and are determined to stay prepared and plan ahead

On average, Practical Savers have an annual income of $200,000 and investable assets of $1 million. Generally, they:

• Place an emphasis on saving, even if that means sacrificing the finer things in life
• Take a basic approach to investing and prefer standard, less risky investments
• May have some lack of understanding of financial products and rely heavily on financial professionals to help them fill the knowledge gap

Our research found that 69% of people in this group tend to rely on their savings as a primary source of income in retirement. However, since Practical Savers express concern about their money lasting throughout retirement, an annuity with an income rider could be particularly attractive to them because of the guaranteed income this type of product can provide.

Practical Savers are greatly concerned about how an unforeseen element could negatively impact their financial future, so it’s important for financial professionals to share options that can help them cover day-to-day costs as well as unexpected expenses. People in this group mostly want to know the basics and are seeking simple, easy-to-understand products that will fit well in their ideal plan.

These are people who are highly driven and constantly strive to achieve their goals and set new ones. They have a growth mindset for their finances with a strong endeavor to leave a legacy for their family. They:

• Are Type A people who are solution-oriented and very intentional about planning
• Could be considered perfectionists as they continuously set high expectations and are always looking for ways to grow their savings
• Enjoy working and advancing with no plans to stop, even during retirement

On average, Motivated Money Makers have an annual income of $200,000 and investable assets of $1.3 million or more. Usually, they:

• Want to do everything they can to maximize their wealth and achieve financial freedom
• Are not afraid to take risks, yet tend to be intentional spenders who view their savings as a security blanket
• Are experienced investors who are comfortable doing their own research but are open to guidance from financial professionals

Our research found that this group is the most likely of the three groups to own a multitude of growth potential products and investments. Nearly 70% of Motivated Money Makers leverage stocks or bonds as their primary source of income for retirement. Since people in this group are open to a wide variety of products to diversify their assets, the market growth opportunities that annuities can provide could be an additional option for them to consider for their portfolios.

Motivated Money Makers are proactive and independent, and they often prefer to take the driver’s seat when making financial decisions. Financial professionals can serve as a mentor, partner, and sounding board to help relieve some of the pressure this group may experience from continuous high goal setting. To feel steady in their path, Motivated Money Makers like to take a hands-on approach and stay in sync with their plans.