Preserving Tax-Deferred Status of Annuity Buildup Vital to Protecting Middle-Income Americans

WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today released new research findings that demonstrate the importance of an annuity's tax-deferred status in helping Americans attain financial security in retirement. IRI's exclusive study found that 76 percent of middle-income Baby Boomers consider tax deferral an important feature when selecting a retirement income product, and nearly a quarter of middle-income Boomers would be less likely to save for retirement if tax incentives were reduced or eliminated.

"Americans, who are facing unprecedented retirement income challenges and are still reeling from the recent recession, are increasingly looking for every incentive to maximize their retirement savings to enhance their financial security in retirement," said IRI President and CEO Cathy Weatherford. "The tax-deferred status of annuity earnings--not tax-free--is a key attribute that has helped Americans to attain financial security through lifetime income coverage. With the overwhelming majority of annuity contract holders being middle-income Americans, now is not the time to eliminate incentives that assist Americans in saving for retirement. We must work to protect the incentives available and reduce barriers so that all Americans can attain a secure retirement."

The report also highlights the adverse effect that tax increases could have on the retirement savings of middle-income Boomers as nearly 60 percent would cut back if income taxes were increased and nearly 40 percent would be less likely to save if Social Security payroll taxes were increased.

The report also found that:

• More than half of financial advisors consider tax deferred growth an important factor when evaluating and selecting annuities.
• About three-quarters of all Boomers place some level of importance on tax deferral in selecting a retirement investment and 44 percent consider tax deferral to be a very important feature.
• About half of Boomers between the ages of 50 and 54 consider tax deferral to be a very important feature of a retirement investment product.
• More than half of all Boomers would be less likely to save for retirement if income tax rates were increased.

The full report can be found HERE.

About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry. Today, IRI is considered to be the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI proudly leads a national consumer education coalition of nearly twenty organizations and is the only association that represents the entire supply chain of insured retirement strategies: our members are the major insurers, asset managers, broker dealers and more than 150,000 financial professionals. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and to advocate before public policy makers on critical issues affecting insured retirement strategies and the consumers that rely on their guarantees. Visit www.IRIonline.org today to experience the vast resources of the Insured Retirement Institute for yourself.

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