Sales of traditional fixed and fixed indexed annuities have boomed during the recession, and the reasons have everything to do with how consumers are feeling and the choices they have to make with their money.
Keep in mind that annuities are merely a place where consumers can store their money and hopefully have it grow, so annuities compete against other places they can store their money, like in products from banks and mutual fund companies.
If you look at products that don’t contractually guarantee your principal, such as mutual funds that invest in the stock market, most consumers have taken a pretty big hit to their value over the past few years. That has caused a lot of consumers to pull their money out of those sorts of places, and those consumers have been looking for a safer place to put their retirement savings. The challenge, however, is that interest rates on traditional safe savings products are at historical lows.
What consumers want is a place where they know their money is safe – that is, protected by contractual guarantees – but they also want a place where they can receive a decent rate of interest over time. That’s exactly what they have been finding when they come to fixed and fixed indexed annuities, and so that’s why sales of these annuities have been booming since the recession began.
Annuities are one of the few places where you can find safety plus a decent rate of interest. Perhaps it is time for you to check them out.