Vast majority of non-qualified annuity holders earn less than $100K, survey shows

Middle-class Americans and women make up the lion’s share of non-qualified annuity holders, according to a survey from the Committee of Annuity Insurers. The survey of 1,003 non-qualified annuity owners across the country showed that 80% had annual household incomes that are below $100,000, according to the 2009 Gallup Survey of Owners of Non-Qualified Annuities. The committee collaborated with The Gallup Organization and Mathew Greenwald and Associates Inc. to conduct the survey. Participants were surveyed by phone in March and April. Slightly less than half of respondents said that they earn more than $50,000 annually, 42% of those surveyed have annual household incomes below $50,000, and 4% have annual incomes that are $200,000 and above. The average household income was just over $75,000. Women made up the bulk of the annuity holders, accounting for 58% of those polled, while 42% of the surveyed individuals were men. The average owner surveyed bought his or her first annuity at 52, and most of the annuity owners (79%) made their first purchase before 65. Nearly all of them have held on to the product, with 93% saying that they still own the first annuity they bought. Those surveyed indicated that their annuities gave them an incentive to save their cash. Eighty-eight percent said that the tax treatment of annuities — which grow tax-deferred — is a good way to encourage long-term savings, while 91% said that tax penalties keep them from making withdrawals from their annuities.