Americans For Secure Retirement

 Some folks want 'em. Some don't. That's the upshot of the 600-plus letters the U.S. Labor and Treasury Departments received in response to a request for information about including income annuities as a pay-out option for 401(k) plans. But there's clearly no consensus on what is certain to become a political hot potato.

 As slogans go, it’s hardly “Keep Hope Alive,” or even “Change We Can Believe In.”But there were annuities, in a report from the administration’s Middle Class Task Force that came out this week. They are among the tools the administration is promoting as it tries to give Americans a better shot at a more secure retirement. At its simplest, which is how the White House seems to want to keep it, an annuity is something you buy with a large pile of cash in exchange for a monthly check for the rest of your life.

Middle-class Americans and women make up the lion’s share of non-qualified annuity holders, according to a survey from the Committee of Annuity Insurers. The survey of 1,003 non-qualified annuity owners across the country showed that 80% had annual household incomes that are below $100,000, according to the 2009 Gallup Survey of Owners of Non-Qualified Annuities.
 

 Women and persons with household incomes under $100,000 tend to gravitate to non-qualified annuities, according to a Gallup survey released today. The survey of 1,003 annuity owners nationwide found that 80% have annual household incomes below $100,000 and only 4% have annual incomes greater than $200,000. Most non-qualified annuity owners are female (58%) with the average owner being a retired 70-year-old woman. Overall, most owners (69%) are retired, which is up from 58% in 2005. Owners’ average age also increased from 66 to 70 between 2005 and 2009.

 Organization/Mathew Greenwald & Associates poll of 1,003 annuity owners. Eight out of 10 annuity holders have annual household incomes of less than $100,000, the poll found, and almost half of respondents (42%) brought in less than $50,000 a year. Only 4% of people with household incomes in excess of $200,000 own annuities. Seven out of 10 annuity holders are retired and 93% of respondents say they still own the first annuity they bought. The average age of annuity owners is 70 years, up from 66 in 2005. Women make up a slight majority of annuity owners, at 58%.

 Non-qualified annuities offer considerable retirement security for middle-class Americans, a new survey suggests. Non-qualified annuity owners show great assurance in their financial future despite the current recession and market downturns, finds the survey of more than 1,000 annuity owners nationwide conducted by the Gallup Organization and Mathew Greenwald & Associates for the Committee of Annuity Insurers, Washington.

 Since the market collapse last year, more investors have been turning to annuities—the ultimate chastity belt at a time when wild volatility in the stock market (and a few crashing lows) have reined in more promiscuous behavior and risk. Given the widespread fear in the Great Recession, it’s no surprise annuity sales have skyrocketed over the last year.  

Nearly three out of five middle-class retirees will probably run out of money if they maintain their pre-retirement lifestyles, a new study from Ernst & Young has concluded.

The study, set to be released tomorrow, finds that Americans will have to drastically reduce their standard of living before retirement to live comfortably, or even avoid destitution, later in life. Middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize their chances of outliving their financial assets, the study found. Workers seven years from retirement will have to cut their spending by even more - 37 percent.