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Not Enough 401k Annuity Options for Workers

The former vice chairman of the Federal Reserve Board, Roger W. Ferguson Jr., is working hard to get Americans to increase their savings for retirement.  According to “Former Fed official: Workers need bigger nest eggs” by Len Bosilovic of the Pittsburgh Post-Gazette, the current employee of TIAA-CREF notes that research shows most couples will be $250,000 short of the money they need for retirement.  He believes that more companies need to make a 401k annuity transfer available to their workers upon retirement since only about a quarter of them do currently.  Ferguson says that you need four things in place to save successfully: enough funding, a diverse portfolio, access to quality advice, and guaranteed retirement income to meet your basic expenses.

While saving 10 to 14 percent of your pretax income should be the goal, Ferguson says that workers should save anything they can at any given time.  Too many people wait because they don’t think they have as much as they should be saving or because their companies don’t offer a traditional 401k plan.  Most 401k plans offer diversification and seeing a reputable financial advisor is the best way to keep from getting confused and obtain quality advice.  Annuities are the best source of guaranteeing lifetime income to cover your basic needs, according to Ferguson.  He does suggest looking into annuities that account for inflation or investing in annuities that give you the potential for a rise in income.  Getting started with your savings plan is the hardest part, so even if you think you are starting late just start.

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