Riiiiggghhht. "Annuities" are quite possibly the worst 'investment vehicle' in the history of mankind. Anyone can buy an annuity now. All you need do is contact almost any licensed Insurance Agent for details.
That however, is not what's being discussed by these people.
Variable annuities certainly are -- the only people that benefit are the ones that collect the fees. But, fixed annuities are a good way to reduce risk, if you are willing to settle for a lower return.
Anyone can buy an annuity now. All you need do is contact almost any licensed Insurance Agent for details.
Yup, that's what I've been trying to tell everyone. The concept isn't new.
That however, is not what's being discussed by these people.
That's not what is being discussed by this blogger, who is trying to alarm everyone so that he can convince them to buy what he is selling.
But, it is what is being discussed by the government. I've read the original request for information/proposal (don't remember the exact name) from the Department of Labor. What they requested was feedback on imposing additional responsibilities for 401(k) administrators.
Right now, a few administrators offer an option to convert 401(k)'s into a lifetime annuity. If I were interested, I'd be a little hesitant to take that option without shopping around. But, the government is considering requiring administrators to offer that option to people that are cashing out their 401(k) or rolling it over to an IRA when they retire.
Another part of the proposal that I found interesting was the requirement to add more information to the quarterly 401(k) statement: an estimate of the lifetime monthly income that would be generated by your current 401(k) balance. I think there was also a proposal to project the monthly amount if you continued to contribute at the same level, until normal retirement age.
The point of this proposal was to make retirement planning easier for 401(k) account holders: they could tell whether they are on track to have enough income in retirement, or if they needed to save more.