It seems that insurance companies are unhappy about their profit margins and risks in sales of variable annuities. To compensate, they are offering new “simplified” products. Unfortunately, these new annuity products have two characteristics that make them even less attractive to purchasers. Rates have increased and benefits have been watered down.
According to this article in the Wall Street Journal, financial advisors are less than thrilled about suggesting these new variable annuity products to their clients. I don’t blame them. Variable annuities are expensive to buy, expensive to own, and make it difficult for the owners to access the invested principal in case of financial crisis. Consumer Reports is very negative about this annuity devaluation.
If people would start earlier with a plan for guaranteed retirement income, they would have better, more secure options.