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Americans who are most in need of formal financial advice are the least likely to seek it, as access to affordable, professional guidance remains out of reach for those with lower income and education levels.
“The advice market does not serve the vulnerable populations — the low-income populations, minority neighborhoods, as well as, other parts of the market. It’s an issue. The marketplace is not equal in terms of access,” says Michael Collins, director of the Center for Financial Security and author of the recent research paper “A Review of Financial Advice Models and the Take-Up of Financial Advice.”
Over one-third of retirees receive income from annuities, but for the majority, instruments provide just 4% of their income, according to a report released Sept. 16 by LIMRA.
“The majority of current retirees relies primarily on pensions and Social Security to meet their daily expenses, with annuities making up only 4 percent of their income,” Jafor Iqbal, associate managing director of LIMRA Retirement Research, said in a press release.
Older retirees were most likely to receive income from an annuity. Almost half of those in their late 70s had an annuity, while just 19% of those under 65 did.
The study found that while household income has little effect on who receives annuity income, household assets are a strong indicator of who receives such income. The percentage of households with under $75,000 who rely on income from an annuity and those with more than $75,000 differed by just five percentage points.
