Annuity Riders

PIMCO’s recent study examines how framing retirement solutions reflects their perceived value by consumers.  

Framing a retirement product as an “income solution” rather than investment returns is more appealing, as it comes across as a stable form of retirement consumption that aligns with their perceived expenses.  However, most retirees typically don’t think about inflation as a threat (known as “money illusion”).  But, when this risk is explained to them properly, they have a preference to inflation adjusted contracts.  

It would seem to me that ALL investment returns and income payouts used to illustrate retirement products/investments should show inflation adjusted figures to help customers understand the real value of the contract.