The Alliance for Lifetime Income took its financial literacy campaign to the streets of Manhattan yesterday with “Protect Your Retirement Income Day.” The program is designed to raise the public’s awareness of annuities as a form of protected income—at a time when creating income is increasingly a challenge in retirement as pensions become instinct.
“More dialogue needs to take place around the aspect of retirement income,” said Stephen Pelletier, chief operating officer with Prudential, a member company of the Alliance. “That’s how people live their lives.”
The nonprofit 501(c)(6) Alliance for Lifetime Income organization was launched in June to educate Americans about protected lifetime income, also known as annuities, as a way to create an income stream in retirement. It provides tools, resources and insights to its member companies that they can use to build plans for protected retirement income.
“The two efforts to educate is with the financial advisor and the consumer,” said Jean Statler, executive director of the Alliance for Lifetime Income. “If there’s more consumers asking about how to get protected lifetime income, then we have to work with financial advisors on how to provide it. Why have they gone away from it? Why don’t they offer it and work with them to close that gap?”
Members that make up the alliance include financial services organizations such as AIG, Allianz, Lincoln Financial Group, Jackson and many others.
Consumer awareness initiatives yesterday included the unveiling in Times Square of a custom alliance vehicle featuring a virtual reality experience about risk and the national debut of a television advertising campaign called “Retire Your Risk.”
“We are trying to increase consumer awareness of the options they have at retirement to provide guaranteed income,” said Michael Finke, chief academic officer at the American College of Financial Services. “The hope is informed consumers will translate into better choices and they will look for guaranteed income options within their 401(k) or talk to a financial advisor. If the consumer doesn’t know to ask, they may be overlooking a financial product that research shows provides value.”
Statler, Pelletier and Finke were among a number of panelists at a media breakfast hosted at the Times Square W Hotel by the Alliance that included AIG Retirement CEO Jana Greer; Jackson National CEO Barry Stowe; Lincoln Financial President and CEO Dennis Glass; and Benjamin Harris, an Alliance research fellow.
“The emerging retirement crisis in the United States is not what we normally talk about, which is accumulation,” Stowe said. “The retirement crisis is creating income.”
According to the experts, the crisis is partly due to longer life spans and the absence of pensions, also known as defined benefit (DB) plans, at a time when Social Security only replaces about 40 percent of preretirement income.