Annuity FYI Visitor Blog

New York Life Insurance Company issued a press release about their number one status with women purchasing annuities.  In “New York Life is Top Provider of Retirement Income for Women,” they reveal that they were the top seller of immediate fixed annuities to women last year.  Of their $1.9 billion in sales, women accounted for sixty-four percent of that.  That’s not really a surprise since New York Life was the first company to offer women life insurance at the same cost as men back in 1894.  Women know that New York Life is a strong and trusted company, so they often choose to secure their future with them.

Women can be at a greater risk of outliving their money than men because of their increased life expectancies and the loss of traditional pensions.  They used to be advised to invest in risky products so that they could make enough money to finance retirement, but these strategies proved dangerous and too risky.  Many women choose 401k annuities to purchase with retirement income that they have built up over their careers.  With lower cost and risk and no chance of outliving your annuity payments, women tend to find annuities as safe alternatives to other investment options.

The Labor and Treasury Departments issued a Request for Information and the details are listed in “Labor, Treasury Departments Seek Ideas on Options for Lifetime Retirement Annuities.”  The article, from the Institute of Management and Administration’s Report on Managing Benefits Plans, talks about the 39 questions asked by the Departments in their RFI.  Their goal is to make defined contribution pension plans and individual retirement accounts become sources of lifetime income through the use of annuities.  “Empirical data” is the number one request from the Departments of Labor and Treasury in their RFI.

Sixteen questions are listed under the category of general, with the first asking for the advantages and disadvantages of using annuities with retirement plans.  They also want to know why more people do not already use the lifetime income solutions from annuities, about using 401k annuities matched by employers, any potential problems employers foresee in offering annuities, among other questions.  All of the information is due to the Departments by May 3, then they will determine what course of action the government will take to help ensure Americans’ retirement.  Since we are living longer but not necessarily managing retirement funds well, the government will look to regulations or legislation to help retirees manage lifetime income through annuities.

In the Wall Street Journal, Brett Arends explains “How to Salvage Your Retirement.”  While there are people that have little to nothing saved and won’t be able to retire when they’d like, many people have employer sponsored pensions or home equity that will help them in retirement.  It’s not always enough though and a lot of Americans don’t have either of those options available.  According to a recent study, forty percent of workers are not saving for retirement.  Arends’ top tips follow.

• Work as long as you possibly can.  This gives you more time to save, allows the savings you already have or are now saving to grow, and lowers the number of years that you will need to use those savings to live.  Delaying Social Security payments is also wise because you will receive more each year.
• Lower your costs of living in retirement.  One of the best ways to do this is to live where the cost of living is low in the United States.  Moving somewhere in the central U.S. tends to have the lowest housing and living expenses.  Even moving a little farther outside of a big city makes a difference.
• Make a plan for yourself that isn’t concerned with leaving money to your heirs.  Immediate annuities and reverse mortgages help you to get more out of the same retirement money.  There are sacrifices to be made for both, so make sure the options are right for you.
• It can’t be said enough: spend less and save more.  While it seems like a simple idea, many people just are not following the concept.  Starting now, wherever you are in the retirement spectrum, will always make a difference and help your future money grow.

Use tax breaks for people over fifty to your benefit and save for 401k annuities and IRAs.  You are able to put more money into these accounts than those younger than fifty.  Take advantage of what the government has to offer.  Work longer, lower living costs, think about your own future, and save.

After President Obama’s Middle Class Task Force began the process of promoting annuities, the US Department of Labor (DOL) and the Treasury have put out a request for information, according to Money Management Executive’s “Treasury, Labor Dept. Issue RFI on Annuities in 401(k)s.  They are seeking out information on the benefits and drawbacks of using 401k annuities transfers to secure retirement income for Americans.  Since participants receive income in lifetime installments with annuities, the Treasury and DOL want to ensure that this form will work the best for the most people.

The American Council of Life Insurers was already excited about the Obama administration’s promotion of using annuities in different types of defined contribution plans.  They said in a statement that they are happy to provide information about the products to the Treasury and DOL.  The Insured Retirement Institute (IRI) will also be putting together annuity information for the departments to use in their research.  The government worries that an increasing number of retirees are opting for lump sum payments of their 401k or other plans.  With annuities, they purchase the product with that retirement money and receive a stream of income payments monthly that are guaranteed over a lifetime.  The departments’ RFI will help them gather more information for government recommendations.

In the Chicago Sun-TImes, David Roeder describes why there is “Little payoff seeking the next Google.”  He summarizes some of the latest financial news and goings-on.  Financial guys on TV always seem to be looking for the next company that will start from nothing and skyrocket to success, like Google or Apple.  But looking into the past 10 or so years, the companies with the highest expected growth potential actually had the worst annualized returns.  It seems that the lowest expectations in the stock market actually provide for the best investments.  There are some large companies whose stocks are being recommended by Chicago Investment banks like William Blair & Co.  Others are looking to invest in products that teenagers love: food & entertainment included.

Companies like MetLife, Hartford Financial, and AIG look to benefit from the Obama administration’s new recommendations.  They are looking to introduce rules that will push retirees to 401k annuities rollovers.  Currently only 2% of people with 401k’s convert them to an annuity in retirement.  Since annuities help to counteract the risk of outliving one’s savings, the government believes that this guaranteed income will help Americans through retirement.  Finance information is all over the news and has even seeped into the entertainment world.  A new documentary entitled “Floored” about the Chicago trading floors is playing in Chicago.  With the renewed public interest in financial freedom, information about stocks, annuities, and retirement is at the forefront of America’s publications.