Jul 28, 2025
Gies Business retirement expert calls for reframing annuities conversation
Reframing annuities as reliable cash flow instead of a risky investment can significantly reduce the stress inherent in retirement planning, according to Jeff Brown, a finance professor at Gies College of Business who has dedicated much of his academic career to unraveling the intricacies of retirement income strategies.
In a recent appearance on the “Humans Versus Retirement” podcast, hosted by Dan Haylett, a UK-based financial planner and retirement coach, Brown explained the distinct advantages of annuities and challenged the financial community to improve how they communicate their value.
"We need to fully embrace the fact that none of us really know how long we are going to live, and that we need to plan accordingly,” said Brown, the Larry Gies Family Chair in Business and Dean Emeritus at Gies Business. “Every one of us has a probability of something bad happening in the near future, but everyone also has an opportunity to live far beyond what we anticipate.”
Brown explained how annuities offer a powerful solution to this dichotomy: Life annuities, issued by insurance companies, transform accumulated savings into a predictable, guaranteed income stream. Investors make a lump sum payment and, in return, receive monthly payments until death.
"We learn to budget on a monthly basis, but for many people in retirement, their pension or social security is not enough to cover expenses,” said Brown. “Life annuity products help bridge that gap, offering a reliable income stream that allows you to maintain your lifestyle budget with confidence, knowing you're guaranteed to not outlive it."
Brown also points to an additional benefit for aging investors.
“Annuities make it easier to manage your finances as your own mental acuity declines,” he said. “They can keep fraudsters at bay – they may be able to scam you out of one month's distribution check, but they can’t steal your corpus.”
This is why an annuity’s familiar cash flow structure can be a powerful tool to reduce anxiety, unlock spending confidence, and empower retirees to enjoy their hard-earned money while they are healthy.
Brown cited research he conducted that underscores the importance of communicating the benefits of annuities in a way that will resonate with investors. He explained that when annuities were framed as “wealth” or an “investment,” only 20% of participants were interested in the product. However, when presented as a bank account for consumption and spending, interest soared to 80%.
This stark contrast highlights the need for clear messaging that shifts the conversation as retirement nears.
“The whole retirement system is built around wealth accumulation and the need to hit your ‘magic number,’ but we almost never talk about what happens after that,” said Brown, who has spent his entire academic career studying a broad array of topics related to annuities.
“For a number of years we’ve been pushing to reframe the conversation about annuities more broadly, then design products and change public policy to focus on their benefits,” said Brown. “To be blunt, it’s a bit of an uphill battle, but we’re making progress one bit at a time.”
Brown stays abreast of marketplace shifts through his research, most recently as a co-author of “Trends in Retirement and Retirement Income Choices by TIAA Participants: 2000-2018.” He is also a member of the Board of Trustees of TIAA, a non-profit financial services company that primarily helps people in the academic, medical, cultural, and governmental fields save for retirement and manage their investments.
As Brown envisions the future role of annuities in an investment portfolio, he expects technological advancements like AI-powered financial advice and virtual aging simulations to help overcome some of the complexity and psychological barriers to annuity investments.
“It’s time to move beyond naive life expectancy assumptions in retirement planning,” said Brown. “Until we fully address the core risk of longevity, our financial models and conversations will continue to fall short of providing real retirement security.”