Guaranteed income was cited by 69% of respondents to a survey of insurance and annuity agents and brokers by Allianz Income Management, followed by safety (23%) and tax planning (8%), as the best reasons to purchase an immediate annuity as part of a retirement planning package. Although immediate annuities were emphasized as an important part of a retirement planning portfolio, 29% of survey respondents say growth and flexibility were missing aspects of immediate annuity option.
According to the survey, the least understood elements of retirement planning were:
- Protection of assets, 39%;
- Income planning, 31%; and
- The length of time actually spent in retirement, 26%.
Advisers and brokers need to better educate their clients, seek new products and rethink their business model, Allianz suggested, ensuring better planning for retirement. The survey found that if someone wants to live at least 30 years in retirement, all things considered, he cannot withdraw more than 4% to 6% of his savings, a withdrawal rate which might be difficult given retirement savings figures.
More information about the survey or Allianz Income Management Services, a company formed by Allianz of North America in 2006, can be found at www.allianzincome.com.