10.08.25
Navigating Longevity Risk: What Americans Really Think About Annuities
by: Caryl Falvey
This article is sponsored by MassMutual Strategic Distributors.
The Longevity Risk Landscape
As demographic shifts reshape the financial landscape, Americans are increasingly exposed to longevity-related risks — living longer, facing unexpected health events and navigating evolving household structures. The MIT AgeLab’s recent study, conducted in collaboration with MassMutual Strategic Distributors, dives deep into public perceptions and understanding of annuities, revealing both challenges and opportunities for financial professionals.
Life expectancy in the United States (U.S.) has surged from 47 years in 1900 to 78.4 years in 2023.1 While this increase offers the gift of time, it also introduces the risk of outliving one’s financial resources. The rise of single-person and dual-earner households adds complexity: individuals may be more vulnerable to income disruptions due to illness, disability or death. Yet, many Americans fail to adequately plan for these risks, often underestimating their lifespan or avoiding thoughts of future incapacity.
Financial professionals are tasked with helping clients navigate these uncertainties. Annuities, alongside disability and life insurance, are key tools in this effort. But how well do people understand annuities — and are they using them?
Annuities: Low Familiarity, Limited Ownership
The study surveyed 1,000 employed U.S. adults aged 25–67 with qualifying income or assets. It found that only 11% of respondents currently owned an annuity, and just 21.1% expected annuities to be part of their retirement income. A majority — 61.5% — did not anticipate using annuities at all.
Familiarity with annuities was similarly low. Nearly half of respondents were either “not at all” or only “slightly” familiar with the product. Only 29.9% reported being “very” or “extremely” familiar. Interestingly, those who owned annuities were far more likely to know others who did — 92.7% versus 33.9% among non-owners — suggesting that ownership may foster community awareness.
Who Knows About Annuities — and Who Owns Them?
Demographic and experiential factors influenced familiarity more than ownership. Men, older adults (55+), current clients of financial professionals, caregivers and respondents who had experienced health changes were more likely to report familiarity. However, these factors didn’t always translate into ownership.
Ownership was more common among:
- Adults aged 55+ (22.4%)
- Current clients of financial professionals (19.3%)
- Parents (12.5%)
- Those anticipating future health events (13.0%)
These findings suggest that life stage and professional guidance play pivotal roles in annuity adoption.
Learning Channels: The Power of Professional Advice
The study highlights a stark contrast in how people learn about annuities. Among non-owners, family and friends were the top source of information, followed by internet searches and employer resources. Only 16.7% cited financial advisors.
In contrast, 60.9% of annuity owners credited financial advisors or planners as their primary source. Owners also relied more heavily on professional channels, including insurance companies, accountants and financial counselors. This underscores the critical role financial professionals play in educating clients and shaping perceptions.
Attitudes Toward Annuities: Owners vs. Non-Owners
Overall, attitudes toward annuities were positive. More than half of respondents viewed them “somewhat” or “very” positively, while only 10.8% held negative views. However, owners were significantly more enthusiastic. Over 90% expressed satisfaction with their purchase, and they rated annuities higher across all metrics — importance, investment value and interest in learning more.
Non-owners, by contrast, showed lower interest in purchasing annuities, with a mean response value of 2.84 compared to 4.44 among owners.
Retirement Concerns: Annuities Aren’t a Cure-All
Despite their positive views, annuity ownership didn’t alleviate concerns about retirement savings. While owners were more likely to rate saving for retirement as “extremely important” (52.7% vs. 40.1%), they were no less worried about having saved enough or converting savings into income. This suggests that while annuities offer peace of mind, they don’t fully address broader retirement anxieties.
Life Events That Spark Interest
Certain life experiences were linked to increased interest in annuities. Among owners, caregiving and lower household income were associated with greater curiosity. Among non-owners, having children, caregiving, recent health events and marital changes all boosted interest. Younger adults (25–44) were more eager to learn, while older adults (55+) and high-income earners ($200K+) were less so.
These insights offer financial professionals valuable entry points for engagement. Life transitions — such as caregiving or health changes — can prompt clients to reassess their financial strategies and open the door to annuity discussions.
Implications for Financial Professionals
The findings suggest three key takeaways for advisors:
- Education is Essential: Many people are unfamiliar with annuities but open to learning. Financial professionals are the most trusted source of information among owners and can play a pivotal role in demystifying these products.
- Life Events Create Opportunities: Younger clients and those experiencing caregiving or health transitions are especially receptive. Advisors should use these moments to initiate conversations about annuities and broader financial planning.
- Engage Current Owners: Even clients who already own annuities may not fully understand their benefits or limitations. Revisiting product choices and exploring evolving needs can reinforce trust and uncover new planning opportunities.
As Americans face longer lifespans and shifting household dynamics, annuities offer a valuable tool for managing financial risk. Yet, low familiarity and limited ownership persist. Financial professionals have a unique opportunity to bridge this gap — educating clients, tailoring solutions and guiding them toward more secure futures. To explore more insights, find the full study here.
Reference
- Murphy, S.L., Kochanek, K.D., Xu, J.Q., & Arias, E. (2024). Mortality in the United States, 2023 NCHS Data Brief, no 521. Hyattsville, MD: National Center for Health Statistics. DOI: https://dx.doi.org/10.15620/cdc/170564
Caryl Falvey is MassMutual Strategic Distributors’ (MMSD) marketing strategy lead. She’s responsible for developing marketing communication programs that include a host of platforms, designed to drive annuity sales within MMSD’s third-party distribution channel. Falvey is known as an early adopter of new communication channels and creative approaches.
Ten years ago, Falvey brought her marketing expertise to what was then a new MassMutual team known as Strategic Distributors. In the beginning, Falvey’s marketing programs were designed to help build awareness among and relationships with large financial institutions. She brought 15 years of prior third-party marketing experience and was no stranger to the challenges and opportunities inherent in building a successful third-party distribution channel.
Most recently, Falvey has been building MMSD’s portfolio of thought leadership opportunities. She has launched a podcast series, journal articles and a biannual speaker series for an audience of financial professionals.
Falvey earned her BA in economics from Hartwick College and her MBA from Rensselaer Polytechnic Institute. Recently, she completed a certificate program in digital marketing at Cornell University.
About The MIT AgeLab
The AgeLab at the Massachusetts Institute of Technology (MIT) was created in 1999 to invent new ideas and creatively translate technologies into practical solutions that improve the quality of life of older adults and those who care for them. The AgeLab applies consumer-centered systems thinking to understand the challenges and opportunities of longevity and changing demographics, to catalyze innovation, and to support people in planning for life tomorrow.
About MassMutual Strategic Distributors
MassMutual Strategic Distributors is a division of MassMutual.
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