Posted on 05/08/2007 11:01:27 PM PDT by CutePuppy
Bill Would Help Retirees Get a 'Paycheck for Life'
(CNSNews.com) - Sen. Gordon Smith (R-Ore.) has re-introduced a bill intended to help middle-class Americans make their retirement income last for their rest of their lives. The Retirement Security for Life Act of 2007 (S. 1010) amends the tax code to encourage the purchase of annuities - investment vehicles that provide guaranteed lifetime income.
Under the proposal, individuals would get a federal tax break on up to $20,000 of the annual income generated by annuities that promise lifetime payments. An average taxpayer in the 25 percent tax bracket would get a maximum $5,000 tax benefit each year. The U.S. Chamber of Commerce has sent a letter to Smith, thanking him on behalf of the three million businesses and organizations it represents. "As the nation's 77 million baby boomers begin to retire, they will start to draw down their retirement savings," the Chamber said in its letter. "The Retirement Security for Life Act would encourage taxpayers to convert these savings into lifetime income annuities. These products provide steady payments for the remainder of the purchaser's life and help reduce the risk of losing one's investments in a market downturn or outliving one's nest egg."
A similar bill introduced in 2005 had bipartisan support.
Here’s the same Senator Gordon Smith (OR) on Iraq issue :
(CNSNews.com) - Congressional leaders from both political parties are giving President Bush a few more months to prove that his troop surge plan is working in Iraq, and it looks like they’ll want some definitive answers by September, the Washington Post reported. “Many of my Republican colleagues have been promised they will get a straight story on the surge by September,” said Sen. Gordon Smith (R-Ore.). “I won’t be the only Republican, or one of two Republicans, demanding a change in our disposition of troops in Iraq at that point,” the newspaper quoted him as saying.
“September is the key,” agreed Rep. James P. Moran Jr. (D-Va.). House Minority Leader John A. Boehner (R-Ohio), said on Sunday, “By the time we get to September, October, members are going to want to know how well this is working, and if it isn’t, what’s Plan B.”
Is Gordon Smith like Chuck Hagel (the other “one of two Republicans” he refers to about his vote about funding troops in Iraq) ? If so, when is his Senate “expiration date”?
I don't know, but annuities are decried by just about all investment advisors as the last way to invest. Smith is a lamebrain who needs to get defeated in the next primary, IMHO.
HA....I’ll bet he’s Really, REALLY tight with the “insurance industry.” Wonder what “KIND” of annuity these are? Some annuities are NOT worth it....depends upon your age, when you die, how you structure it, etc.....there are others here who probably know a lot more than me about them....but, I smell something fishy.
Yeah, we wouldn’t want our Ponzi Scheme, ur, I mean Social Security payments going into investments vs. Gore’s “lock box”, now would we? But annuities, that’s okay. What mental midgets!
Yes, annuities “are sold, not bought” because they generate big commissions and fees to insurance companies and money managers.
Also, generally it’s a lousy idea to mix insurance and investment in the same instrument (returns are usually paltry or negative) compared to separating term insurance and investing the rest.
Social Security, of course, is “sold” to us as an “insurance program” - and it shows. Now this Gordon Smith comes up with what - “Son of Social Security”, instead of liberating people to provide as many choices for tax-free investment of their own money?
It’s like a race :
Democrats keep coming up with the new idiotic tax schemes (including Global Warming), and take over private industry under government control and funding (Healthcare funding / Insurance).
Republicans, instead of challenging them directly, are trying to counteract by coming up with some silly tax shelter schemes (like these annuities, or numerous separate tax-deferred accounts), or administer government-mandated programs through large private corporations (like Medicare Part D Drug Program).
Looks like the proposal applies to “annuitized” policies, those that have been converted into lifetime payments. I smell an industry campaign contribution
Uh, my company sells these. They’re called “annuities.” KEEP THE GOVERNMENT OUT OF MY BUSINESS PLEASE!
I think this is the type of annuity that he is talking about. In earlier times, retirees could count on a pension, or a defined benefit plan. Now, workers save for their own retirement, but what do you do with the pile of money you have when you do retire? By buying this type of annuity you can create your own 'defined benefit' plan. I think this should be encouraged. My grandfather was approached by someone from his church when he retired who sold him a trailer park as a 'retirement investment.' Took all of his retirement savings. I think many retirees would be better off if they had their money safely in a annuity for a steady stream of income they can live off when they retire. It would also help keep it away from people who prey on elderly.
I like this part of Clark’s take on annuities. Makes you wonder why the government would want to force retirement money into these when you can loose everything if you die. hmmm.....
A better plan would be reduce or eliminate ALL taxes on retirees or persons over a retirement age. Of course, with the aging of america, they'll probably have to increase taxes on the aged to keep funding all the other give aways.......as long as it lasts.(see gm, ford, chrysler)
The government is scrambling now that their fat cow is aging. They won’t be happy until they tax everything their once ‘golden goose’ has managed to save and invest. They knew this was coming for decades and cried, “nothing is going to affect SS”. BS!
No educated investor buys annuities.
Annuities “may” or “may not” be a good retirement investment. All one needs to know is the “date certain” of your death. If you know you’ll live longer than the actuarial average, you come out to the good. Otherwise...
What a stupid idea. So, if I give my money to some big business, and they pay me, I get a $20,000 deduction. But if I decide to manage my OWN investments, I don’t.
Thus they are not helping me, but subsidizing the annuity industry.
BTW, I’m fine if we exempt the first $20,000 of retirement income from taxes, so long as the exemption applies no matter where you get the money from.
Let’s make the tax code even more complex and loophole filled.
Yeah that’s the right stuff!
NOT
Are defined benefit pensions subject to income tax? Are there special loopholes for certain classes of pension income, say teachers, military or government workers? I believe in some states there are. What about in the fed tax code?
“No educated investor buys annuities.”
Imagine its 1929..You had an opportuity to invest $100K in the market in 1928 or buy an anuity that would pay you $400 a month for the rest of your and your wife’s life.
Now imagine its 1932 and that $100K stock market investment is gone with the wind but you are still getting the $400 a month..
Who was the ‘educated investor’?
Go to www.investmentnews.com. They have been having stories about this for a while. So many tweaks to the code, Roth 401k's auto enrollment etc, being proposed/implemented that I have lost track.
I think the annuity sales folks and their lobbies want a bigger part of the pie now that more people understand them, and need an incentive (tax) to sell them.
This is not advice, but it is to bad we have an inverted yield curve. As an alternative, advisers would sometimes recommend a "Bond Ladder" but again with the yield curve the way it is, that is tough to do right now.
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