A recent report from the administration’s Middle Class Task Force had the insurance industry buzzing last week when it named annuities as one of the tools that give Americans a better shot at a more secure retirement. Read the New York Times article here.
Seeming to focus on single-premium immediate annuities (SPIAs), the Obama Administration recognizes that the biggest risk that middle class Americans face in retirement is running out of money, and annuities with guaranteed lifetime payouts help ensure that you don’t.
The New York Times article goes on to mention several common objections to SPIAs — death benefit, inflation, risk of the insurance company failing — and a couple of proposed bills that could help more advisors overcome these objections:
S. 2832 — The Lifetime Income Disclosure Act would require retirement plan administrators to give account holders an annual estimate of what sort of annuity income payout their savings would buy. That way, people would get used to thinking about their lump sum as a monthly stream.
H.R. 2748 — The Retirement Security Needs Lifetime Pay Act would encourage workers to annuitize some of their retirement savings by providing a 50 percent tax exclusion for up $10,000 of lifetime annuity payments each year.
Put simply, there is a lot of momentum behind SPIAs right now, so it's a good time to re-evaluate your product portfolio to make sure you are positioned with the right products.
Senior Market Sales offers SPIAs from a number of different carriers.
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