For most, retirement will be a time of tough decisions about how to position their investment portfolios for both growth and a stream of income. And that is exactly where payout annuities can fill the void. Few boomers today even know what a payout annuity is, and producers still concentrate on building assets. That may seem like a lot of financial security, but studies show that individuals worry that their own assets won't last their entire lives. That's where payout annuities come in.
Insurers view the product as a diversification tool.
It's just the piece of money they'll need for an income guarantee. They can allocate the rest in liquid accounts. Jeff Botti, a spokesman for Nationwide Financial, Columbus, Ohio, predicted that the payout-annuity market will grow rapidly. Individuals can become owners of a payout annuity in two ways. For money that is not yet invested in an annuity, a prospect may buy an immediate annuity, which begins the payouts soon after purchase.