National Retirement Planning Week took place in April, and the whole month was Financial Capability Month. April was full of encouragement for individuals to move their retirement savings plans forward.
California’s insurance commissioner, Dave Jones, took part: He put out a widely circulated press release encouraging all Californians, and all Americans, to consider the role annuities can play in securing their financial future.
“Whether you are a Baby Boomer, Gen Xer or a Millennial, you need to be proactive and have a plan for retirement,” Jones said.
I was impressed to see Jones work to educate people, to ensure that they understand how crucial it is to be aware of all of the retirement options, including annuities, that can help protect their future financial security.
And I wasn’t surprised by his comments. Why? Because, when it comes to retirement savings strategies, adding a fixed indexed annuity can diversify and bring needed balance to a retirement portfolio, and complement employer-offered plans, like 401(k) plans.
Fixed indexed annuities are becoming more mainstream in retirement planning as consumers begin to realize and desire the benefits of income for life. Commissioner Jones’ comments mark an important shift in how regulators view retirement savings strategies and the value annuities can have for consumers looking for financial piece of mind into their golden years.
Since financial needs vary across age, economic stability and retirement goals, Jones made sure to emphasize that annuities may not always be the best option. Jones recognized, like my own group, the Indexed Annuity Leadership Council, that an annuity isn’t for everybody. The best first step is to be aware of the options and consider all of the financial vehicles that may play a role in creating a balanced portfolio.
By 2030, one in five Californians will be 65 or older. With the entire U.S. population aging, it’s more important than ever for individuals to be informed and understand how much they will need to save.
Annuities have been misunderstood in the past, but failing to encourage consumers who are saving for retirement to consider annuities denies them the opportunity to consider a product that could be an important component in their retirement portfolio. Not giving consumers the options they need to create the proper combination of risk and conservative choices could cripple the retirement dreams of many Americans.