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Annuity ownership drives retirement savings confidence

A new survey by Athene, a prominent supplier of retirement savings products, found that almost half of Americans saving for retirement (49%) believe they are on pace to meet their retirement savings objectives. However, annuity ownership may dramatically change their attitude for the better. 75% of annuity owners said they felt on track toward the same goals as the general population, indicating a 26% rise in confidence. Over half of Americans (55%) are concerned that they would outlive their retirement funds, according to a survey that asked individuals in the United States about their retirement savings methods, perspectives on current market circumstances, and knowledge and comprehension of annuities. Mike Downing, Athene’s Executive Vice President, Chief Operating Officer, and Chief Actuary, emphasized the importance of financial professionals and their customers considering savings vehicles that may provide growth and security for both present and future financial requirements. “Goals, tactics, and timescales between the time of beginning planning and retirement all change as market conditions shift. By safeguarding funds and providing a lifetime income, annuities may bring peace of mind.”

Nearing retirement, people become more risk-averse.

Regarding retirement savings, 18% of annuity owners say they rely solely on their annuities. More than a third of Americans (36%) say they rely primarily on employer-sponsored retirement plans, such as 401(k) or 403(b) plans, for their retirement savings (20%). In contrast, more than half of those saving for retirement (58%) say their retirement plan will become more risk-averse as they near retirement. 71% of people saving for retirement said they’ve modified or are considering adjusting their retirement savings plan to account for inflation, according to a recent survey. 62% of respondents said that a decline in the market or a recession would negatively impact their approach.

Annuities are riddled with misconceptions.

Many Americans (23%) are unfamiliar with annuities, yet they know the advantages of variable, fixed, and indexed annuities. 64% of respondents are looking for retirement savings solutions that offer guaranteed income, favorable tax treatment, and flexible features and advantages. A large majority of those polled preferred receiving their retirement funds in installments rather than as a single payment (71% versus 29%). However, according to the poll, there are still many misconceptions about annuities. Only 27% of Americans know that annuities provide for tax-free development, and only 22% know that they protect against down markets when asked to mention the attributes they think are true of annuities.

Trusted financial advisors have an impact on annuity interest.

People who have never dealt with a financial expert (6%) have significantly higher rates of annuity ownership than those who have (40%). Regarding annuities, more than half of Americans who work with a financial advisor and haven’t yet purchased an annuity (58%) say a suggestion from their financial advisor or another trustworthy source would make them more willing to explore annuities. Working with a financial advisor can help you better understand an annuity and how it works. 36% of people who have never worked with a finance expert claim they have no idea what an annuity is, as opposed to 8% of those who are actively working with an expert. More than half of individuals who understand annuities but haven’t made an annuity purchase due to lack of cash, the fees and expenditures connected with annuities, and the perceived hazards of annuities are holding them back from making an annuity purchase (22%). If they had more information and education about annuities (37%), if reduced upfront fees were involved (32%), and if a financial professional or reliable source advised one, this group would be more inclined to purchase an annuity (26%). It is critical for financial professionals and retirement savers alike to debunk the myths and adequately grasp the benefits and functionality of annuities as market volatility and inflation continue to climb,” said Adam Politzer, Senior Vice President of Product Actuary at Athene. Financial advisors and retirees need to understand the tax advantages, downside protection, and growth possibilities of an annuity.
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Kathy Hollingsworth

Kathy Hollingsworth – Federal Employee Benefits Specialist Originally from Birmingham, Kathy received her advanced education at Birmingham-Southern College. Kathy’s professional career began with 30 years in the media industry (radio and television), but will end serving senior citizens. As director of a senior center for five-and a half years at the largest senior center in central Alabama, Kathy has devoted her life to meeting the needs of senior citizens. Due to continuing education and working with companies that specialize in finding the best financial products, Kathy stands ready to help her clients find solutions to the problems that arise while in retirement and planning for retirement retirement. For the last eighteen years, Kathy, a Federal Employee Benefits Specialist, has assisted in helping federal employees make wise, frugal retirement decisions. Kathy also became a Registered Rep in 2018 (CRD 6832692) and an Investment Advisor Representative (Fiduciary) in 2021. In addition, Kathy is a licensed mortgage originator (License #212553), specializing in VA, FHA and Conventional mortgage loans. Kathy has written many articles for the Montgomery Area Council on Aging, Montgomery Advertiser, and Alabama Gerontological Society on the subject of seniors. Kathy was the keynote speaker at Alabama’s State Capitol in Montgomery for the State Combined Campaign Salute to Seniors in 2005. Kathy also writes articles on Federal Benefits and Insurance subjects. A Certificate of Recognition was awarded to Kathy in 2005 by Governor Bob Riley for her service to state, family and community. Every free moment Kathy gets is spent with her grandson Konner and two dogs, Sallie, and Sassy.

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