There’s a good chance many of your clients are experiencing worry over retirement. Such a significant life transition is bound to come with feelings of apprehension, and it’s typically the financial side of things that gives clients the most pause. Fortunately, fixed annuities could be the ideal solution to provide clients with a valuable product while also reducing retirement trepidation.
The benefits of a fixed annuity
Like with life insurance and other types of investment, annuities lead to greater feelings of financial security thanks to the guarantee involved. In most cases, a fixed annuity can act as a guarantee that individuals will not outlive their income – a growing fear as people continue to live longer lives.
Financial advisors who do not include annuities among the products they offer are missing out, as worry over retirement only appears to be expanding. More individuals are turning to professionals for financial advice, and retirement planning is often the driving force.
Fixed annuities, along with products like life and long term care insurance, provide clients with the tools they need to face retirement confidently.
Future costs leave Americans concerned
It’s not just maintaining a comfortable lifestyle that has Americans worried about their retirement prospects. Many individuals are even more concerned with the future costs of aging as they’re related to health care.
In fact, research from Fidelity shows that health care costs for couples in retirement are on the rise. They estimate that a couple, aged 65 and retiring in 2016 will need $260,000 to cover health related expenses.
“In recent years, the health care industry has experienced a period of historically low spending levels, due to a range of factors including a period of slow economic growth,” said Adam Stavisky, senior vice president, Fidelity Benefits Consulting. “Looking forward, we expect health care spending to pick up2 from where it’s been in recent years, though less than what we’ve seen over the last few decades.”
In addition to standard health care, which can at least be partially financed by Medicare, retirees must also come to terms with the need for long term care.
Since Medicare can only be used to fund long term care in very limited and temporary instances, it’s vital for Americans to invest in ways to fund their future care needs.
In addition to LTC insurance, a fixed annuity can be counted on to provide steady income as long as an annuity holder lives. Together with Social Security, life insurance and other investment opportunities, fixed annuities can offer your clients the reassurance they crave and help them obtain the services they need as they age.
Editor’s Note: This post was originally published in December 2014 and has been reviewed and updated.