Here are some interesting highlights from IRI’s latest report on the “State of the Insured Retirement Industry,” published in December 2016:
- The first Baby Boomers were born in 1946 and turned 70 last year. There are about 3.4 million of them.
- The largest wave of Boomers, approximately 33 million, were born between 1952 and 1959 and will begin to retire this year.
- The Pew Research Center estimates that 10,000 Baby Boomers will turn 65 every day for the next 14 years.
- The average pre-retiree (age 55-65) has $136,200 saved for retirement according to the “2015 Blackrock Global Investor Pulse.”
- Millennials are starting to think about retirement, as the oldest of that demographic group turn 35. IRI research shows that 68% of them are saving for retirement, and 65% believe Social Security won’t provide them with meaningful income. “It is a generation thirsty for guidance, as they rapidly move into their peak earnings years,” the report says.
- Expect the continued development of new hybrid insurance products such as long-term-care riders on life and annuity policies. These are designed to provide affordable solutions to traditional long-term-care policies.
- There are still relatively few Fixed Indexed Annuities (FIAs) offering guaranteed lifetime income benefits, but more carriers are creating them, and sales are growing.
- “Uncapped” FIAs (no cap on the amount of interest potentially credited to policies) are generating widespread interest, and word on the street (anecdotally) is that sales of uncapped FIAs are growing.
- IRI research shows that among the most important traits of a retirement product are “guaranteed income each month” and “will not lose principal.”
- Increased longevity is a key reason that guaranteed lifetime income is so important. According to the Society of Actuaries’ “2012 Individual Annuitant Mortality Tables With No Mortality Improvement,” for a couple aged 65, there is an 85% chance one of them will reach age 85, a 67% chance one will reach age 90, and a 25% chance one will reach age 95.
If you’d like to obtain a complete copy of the report, visit http://www.irionline.org/ to become a member. The IRI Marketing Summit 2017 will take place March 19 – 21, 2017, at the Fairmont Chicago Millennium Park. We will be there.