Baby Boomers like attributes of annuities, but some may find traditional annuities intimidating, says ING Study
A new study of American investing habits and goals shows that nearly half of Baby Boomers earning at least $50,000 a year like the benefits offered by annuities, but 42 percent of respondents say they are intimidated by the products.
The study, conducted by ING and the research firm Roper Public Affairs, found that Baby Boomer women are particularly interested in the benefits of annuities. Nearly 6 in 10 Boomer women surveyed agree with the statement “protecting my retirement savings from loss is important, but I also want to be able to grow my savings.” Four in 10 men agreed.
The study also showed that nearly 70 percent of respondents believe annuities can provide a reliable savings source for income in retirement, though 46 percent say they do not know enough about the products to decide whether or not they are a good investment.
Responding to market needs, ING, through its retail annuities business group, is introducing ING Simplicity, a new variable annuity in its portfolio of products, making the company the first to streamline virtually every key aspect of an annuity and refine the possibilities of retirement savings. ING Simplicity combines sought-after, built-in benefits into a simply packaged approach and product.
“Our study finds that Baby Boomers like the attributes of annuities but a significant number of people find the product intimidating,” said Ann Cutts, senior vice president and head of business development for ING Retail Annuities Business Group – a division of ING U.S. Financial Services. “ING Simplicity was designed to appeal to investors who are interested in risk protection and savings growth in a convenient, straight-forward package. ING Simplicity combines the features consumers want for their retirement savings plans.”
The ING study finds that Baby Boomers may be relying too heavily on restricted investment vehicles to fund their retirements:
- More than 6 in 10 Boomers surveyed will rely on such restricted investment vehicles as 401(K) plans, Keogh plans or pensions to fund their retirements.
- Fewer than 2 in 10 Boomers surveyed say they will rely heavily on stocks and bonds to fund their retirements.
The study also shows that:
- Nearly 7 in 10 Boomers say they expect to maintain their current lifestyles in retirement, though the percentage declines slightly with Boomers closer to retirement age.
- Only 2 in 10 Boomers feel annuities are for wealthy people with high incomes.
ING Simplicity streamlines and simplifies a new generation of retirement planning at a time when people need to be saving more and seeking to grow their savings for retirement.
“The initial response to ING Simplicity exceeds our early expectations,” said John Harline, senior vice president and national sales manager of emerging business for ING’s Retail Annuities Business Group.
Harline continued, “According to the study, a majority of Boomers are very positive about annuities. We are introducing ING Simplicity as an option for those who value the unique benefits of an annuity, but may have steered away from an overwhelming volume of information, features and decision-making.”
ING Simplicity reflects ING’s bold step in being the first to bring to market this concept for financial services:
- Built-in features, free from overwhelming choices of layers of benefit options
- First-of-its kind integrated living and death benefit – built-in
- Simple investment options – four asset allocation fund-of-funds – built-in diversification and upside potential – tailored to risk tolerance
- Streamlined benefits means a streamlined prospectus and single-page application – a simple process with dedicated processing and service teams
Financial professionals interested in more information should call: 888-4ING123
The Roper Public Affairs division of GfK NOP Research and Consulting conducted the survey on behalf of ING.
The results highlighted in this report are based on RDD-telephone interviews conducted from September 16- 20, among a nationally representative sample of 500 Baby Boomers (adults age 40-59) with an annual household income of $50,000 or more in the contiguous United States.
Weighting targets were applied to the data to ensure that the sample reflects census projections for adults in this age and income range by sex, education, race, and geographic region.
The margin of error for the full sample (n=500) at the 95% confidence level is 5.5 percentage points.
Investors should consider investment objectives, risks, and charges and expenses of the variable annuity product and underlying investment options carefully before investing. The prospectus for the variable annuity product and underlying investment options contain this and other information. Investors and financial professionals may obtain a prospectus by calling ING USA’s Customer Service Center at 800-366-0066. Investors should read the prospectus carefully before investing.
ING variable annuities are flexible premium deferred combination variable and fixed annuities available in most states. ING variable annuities are issued by ING USA Annuity and Life Insurance Company and distributed by Directed Services, Inc., member FINRA. ING Simplicity Variable Annuity is not available in the State of New York. ING USA Annuity and Life Insurance Company is not admitted in the State of New York. Variable annuities are long-term investment vehicles designed for retirement purposes and are subject to market fluctuation, investment risk and possible loss of principal. Variable annuities are not insured or guaranteed by the FDIC/NCUA. Past performance is no guarantee of future results.
ING Group is a global financial institution of Dutch origin offering banking, insurance and asset management to more than 60 million private, corporate and institutional clients in more than 50 countries. With a diverse workforce of more than 112,000 people, ING comprises a broad spectrum of prominent companies that increasingly serve their clients under the ING brand.
ING is a leader in providing 403(b) plans to kindergarten through 12th grade educators and other employees of nonprofit organizations in America. In the U.S., ING offers a comprehensive array of financial services to retail and institutional clients that includes retirement plans, mutual funds, managed accounts, alternative investments, direct banking, institutional investment management, annuities, life insurance, employee benefits, financial planning, and reinsurance. Currently, ING holds top-tier rankings in key U.S. markets and serves more than 14 million customers across the nation. For more information, visit www.ing.com.