Americans Optimistic About Retirement Horizons; Study Reveals Expectation for Longer, More Active Retirements Than Parents.

RESTON, Va. -- New Study Shows 65 Percent Believe They Will Live Longer than Parents and 76 Percent Plan on a More Active Lifestyle

The results of a new study by the National Association for Variable Annuities (NAVA), provides new insight into how Americans view the duration and nature of their retirement.

A "retirement horizon" is the span of time spent in retirement or semi-retirement: the period when, for most Americans, employment will no longer provide the majority, if any, of their income. NAVA conducted the study to obtain a greater understanding of the mind-set and expectations of the average person approaching retirement.

"Those entering retirement assume that they will be living longer, spending more time in retirement and be more active than their parents were. As a result, they will require a greater degree of financial freedom to live this lifestyle," said Mark Mackey, president and CEO of NAVA. "Today's annuities are keeping pace with this new generation of retirees and their changing needs, providing a broad spectrum of benefits, including retirement income, market growth potential, and protection of their hard-earned retirement savings."

Highlights of the 2005 Retirement Horizon Study include:

--Lengthy retirement horizons starting at age 65 or earlier - 53 percent of respondents expect to live from 16 to 30 years or more in retirement. At the same time, 34 percent think they will retire between 50 and 64, illustrating that retirement horizons lasting decades could be becoming increasingly commonplace.

--Longer, more active retirement than parents - 65 percent of Americans today expect to liver longer in retirement than their parents did. In addition, the overwhelming majority (76 percent) believes that their retirement will be more active than that of their parents.

--Healthier lifestyles increase retirement horizons - 35 percent of respondents cited healthier lifestyles as the primary reason they expect to live longer in retirement than their parents. Closely following, 32 percent responded that medical advances would be the primary reason.

--Financial sufficiency determines retirement age - 48 percent of respondents believe attaining financial freedom will be the main factor in determining their retirement age.

--Retirees desire freedom - Quality of life is critically important to retirees. For example, 92 percent of Americans want the freedom for leisure activities, while 86 percent desire the freedom to travel.

New Annuities for a New Retirement

Today's annuity products are uniquely designed to address increasing retirement horizons and other new retirement realities. "Living benefits" offer annuity holders greater liquidity, flexibility and a broader range of features than in the past:

--Guaranteed Income - Most annuities today provide the option of guaranteed income payments, some that protect against market risk, which can last for an individual's entire retirement horizon. This annuity feature is increasingly beneficial as fewer Americans have access to pension plans to supplement their Social Security.

--Investment Gains and Protection - Annuity living benefits provide principal protection against downside market risk, ensuring that irreplaceable retirement savings are secure. This feature gives older Americans, who are now spending more time in retirement, the confidence to stay invested in the stock market where the highest returns have traditionally been, and allows a portion of their retirement savings to grow tax-deferred to be accessed later.

--Liquidity - Many annuities today offer the ability to withdraw a portion (e.g., 10 percent) of the initial investment per year without surrender charges. Many annuities also provide retirees full access to their money - also free of surrender charges - in situations of poor health. And, increasingly many providers now offer products with short or no surrender periods.

Like any investment, an annuity is not for everyone. Individuals should consult with their financial advisors to assess their situations and determine if an annuity is appropriate for them.

About the NAVA 2005 Retirement Horizon Study

The 2005 Retirement Horizon Study was conducted by Kelton Research for NAVA. A broad national cross-section of 1000 respondents was polled via telephone between April 18 and April 22, 2005. The study has an error rate of +/- 3.1 percent.

About the National Association for Variable Annuities (NAVA)

NAVA is a non-profit trade association located in suburban Washington D.C. NAVA provides a variety of services to the industry including educational forums, research and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance. NAVA also maintains and supports an educational website for consumers at www.RetireOnYourTerms.com.