Deferred Annuities Gain Popularity

In order to offer more options for a public increasingly nearing retirement age, more companies are beginning to offer deferred annuities in lieu of traditional pensions. Similar to life insurance, these annuities offer a way for individuals to bet on their own life span, paying a lump sum for a policy that will return a guaranteed yearly income for life.

As people live longer and retire earlier, the possibility of outliving one’s savings has become a very real one, and deferred annuities protect against that risk in ways that other pension plans don’t.

In 2013, sales of deferred annuities more than doubled from the previous year, reaching a total of $2.2 billion.

 

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