Annuities: Love ’em or Hate ’em, Here’s What Advisors Should Know
October 29, 2019 by Bernice Napach
No matter what you think of annuities, they are growing in popularity and could provide the income that clients approaching retirement are not likely to get from financial markets these days.
“It’s an expensive time to retire because financial markets are not giving us much,” said Michael Finke, professor of wealth management at The American College of Financial Services, one of several retirement-focused professionals who participated in a recent annuities “master class” for reporters. Historically low yields on bonds make them “significantly more expensive compared to their ability to generate income,” said Finke.
Stocks, too, are not expected to offer great returns for retirees and those nearing retirement.
David Blanchett, head of retirement research at Morningstar Investment Management, said Morningstar is estimating a 1% annual return on stocks for the next 10 years compared with the 7% average that prevailed between 1926 and 2019.