Having a guaranteed income source in retirement may help provide peace of mind for many people. Running out of money in retirement or outliving your savings is a risk many people fear. In these situations, a fixed income annuity may make sense. Fixed income annuities offer features that other products can’t, such as high cash flow, returns not correlated to the stock market, mortality credits, and longevity hedging features.
Towers Watson produced a report based on a longitudinal health and retirement study by the University of Michigan titled, Annuities and Retirement Happiness. This study found that annuities provide the biggest satisfaction boost to retirees with less wealth and those in poor health. This study also found that retirees with a higher percentage of annuitized income were happier on a cross-sectional basis and maintained higher levels of satisfaction over time than their less annuitized counterparts.
Click on the attachment to see the full report - Annuities and Retirement Happiness
You may also want to read HOW DO ANNUITIES DIFFER AND ARE THEY RIGHT FOR ME to learn more on the different types of annuities.