Financial universities and the political arena are beginning to see the green -- the green in annuities. They are becoming aware of the long-term income value, safety, and the guarantees of streams of income for life that relieve the fear of outliving one's money.
Samuel Johnson said, "It is better to live rich than to die rich." Guaranteed streams of income for life can help us live a richer life without fear of running out of money. Is it possible? Could annuities become the official retirement vehicle of the Obama administration?
The wake-up call
Corporate, state, and federal government pension plans are underfunded by trillions of dollars, with Social Security and Medicare $88 trillion in the red. Meanwhile, stimulus and bail-out packages have served as a national wake-up call, as 77 billion baby boomers witness the demise of 401(k) plans.
It is an urgent call for safe, secure retirement plans. Where can we turn? To annuities.
Financial universities and economists around the globe have concluded that income annuities can provide an income for life at a cost as much as 40 percent less than a stock, bond, and cash mix while, annuity companies were introducing superior lifetime income benefit riders.
Now here's a big helping hand
A recent House bill proposes waiving 50 percent of the taxes on the first $10,000 in annuity payouts each year. Now that's great news.
Much of the news media has not caught on
The lifetime income benefit riders can increase the income value by 15 percent to 18 percent in one year and guarantee and income stream for life without giving up control of the cash accumulation in the event of death before receiving a full distribution. And, they offer assurances of an income for life should the cash account go bust.
In January 2010, the Obama Administration's Middle Class Task Force included annuities as a means to provide Americans a better opportunity for a more secure retirement.
Now, just as the Obama administration starts to recognize annuities as a retirement income bailout we begin to see some disturbing headlines. Toyota announces plant closings, and Greece, Portugal, and Spain plunge further into recession. The concern about the Euro increases the awareness that to survive the financial tsunami, we must make provisions for ourselves individually.
Perhaps, the greatest safeguard for IRAs, 401(k)s and TSAs is fixed annuities with premium bonuses and lifetime income benefit riders backed by statutory cash reserves.
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