Every June, financial professionals, insurance companies, and advocacy groups across the United States observe Annuity Awareness Month. The initiative was established to educate consumers about annuities and their role in retirement planning. As Americans face increasing concerns about outliving their savings, annuities have emerged as a critical tool for creating financial stability in retirement.
According to the Alliance for Lifetime Income, a growing number of Americans are entering retirement without traditional pensions, increasing reliance on personal savings and Social Security. Yet many people are unaware of how annuities can fill this gap. Annuity Awareness Month aims to bridge that knowledge gap by promoting financial literacy and encouraging individuals to explore options that can provide guaranteed lifetime income.
Not everyone understands annuities. If people understood that annuities are the only instrument that can guarantee a paycheck for the rest of their life, no matter how long they live and how the different types of annuities work to protect and grow retirement savings annuities wouldn’t have such a stigma surrounding them.
Common myths often deter consumers from considering annuities, such as:
- “Annuities are too expensive.”
In reality, there are low-cost options, and fees vary depending on the type. - “I’ll lose access to my money.”
Many annuities offer withdrawal features, liquidity options, and death benefits. - “They’re too complicated.”
While some annuities have complex structures, many are straightforward with clear benefits.
Most articles cite so-called experts on annuities, thinking they understand how annuities work, and can tell clients just why they should never purchase an annuity.
The big name on the door of these brokerages who advertise and have offices across the U.S. generates implied authority with prospects, but this also gives reasons why they may not be the best source of information to educate the public.
Likely, these advisors only sell the products the big brokerage firm allows them to. These advisors are incentivized to grow AUM and taught their 1% fee is a strong piece of evidence of how they always act in their clients’ best interests. They would never sell an annuity with an upfront commission. Never mind how being paid 1.00% every year only if the clients keep their money invested disincentives the advisor to recommend moving the funds out of management even when annuities offer clients the safety and guarantees they are asking for.
As an industry, we need a credible source of information about annuities. Annuity Awareness Month is more than just a campaign—it’s a call to action for people to take control of their financial futures. By understanding how annuities work and the value they can provide, clients can make informed decisions that offer peace of mind and financial confidence throughout retirement. You can participate by reviewing your client’s retirement plan to see if an annuity fits their goals or by sharing educational materials on social media or by emailing your clients to help them learn about annuities. Please get involved!