Inflation is one of the factors reminding people they have to plan for their own retirement, according to Doug Wolff, CEO of Security Benefit, a Topeka, Kan.-based firm that focuses on the retirement market by providing annuities and mutual fund products.
In many ways, individuals are now responsible for setting up their own retirement, said Jackie Morales, chief operating officer of Security Benefit. The two spoke to Financial Advisor magazine in a recent interview.
“The fact that inflation is higher now is a pull on those near retirement,” Wolff said.
Morales added, “Retirement is a challenge for everyone, but there are things people can do to prepare.”
“The recent market volatility is another factor that has reminded people the market is not always going to go up” and they cannot count on a market increase to pay for their retirement, Wolff added. “That fact is steering people toward annuities and other guaranteed income products. All the signs we see are that annuities will continue to go up in popularity.”
Security Benefit is seeing interest grow in longer-term guaranteed annuities, a demand that is likely to continue into 2023 as long as market conditions remain unstable, the two executives said. On the other hand, if the Federal Reserve Bank continues to raise interest rates and equities start to rise without so much volatility, the annuity market may shift from fixed-rate products to variable rate products, Wolff said.
The SECURE 2.0 Act, which is headed to President Biden for his signature, will make it easier for individuals to set aside money for retirement, they said. “People want to be able to put money away as long as they can to be better prepared for retirement. We want to be where the advisors and their clients with appropriate products,” Morales said.