Why Annuities Are Popular

https://www.nytimes.com/2019/05/24/opinion/letters/annuities-retirement-income.html

Version 0 of 1.

To the Editor:

Re “The Way to Stop Predatory Lending” (editorial, May 23):

We take issue with your criticism of fixed indexed annuities. These products, and indeed all annuities, can provide a guaranteed monthly income for the rest of a policyholder’s life, acting much like a personal pension plan or Social Security

In an era when just 4 percent of private-sector workers have defined benefit pension plans and when Social Security will cover just 40 percent of most people’s pre-retirement income, a guaranteed source of retirement income, like annuities, is a vital safety net.

Sales of annuities are also growing for other important reasons, including rising market volatility and higher interest rates.

The annuities industry — like every industry — faces rare, unacceptable sales practices. Yet annuities are popular because they provide retirement security in a volatile financial world. Far from criticizing them, you should be encouraging them.

Jean StatlerWashingtonThe writer is executive director of the Alliance for Lifetime Income.