The country’s movement away from defined benefit plans (such as pensions) to defined contribution plans (such as a 401(k)) placed more responsibility on individuals to manage their own nest egg. Studies show Americans have done poorly at this task.
In fact, the federal government is promoting annuities as a retirement savings tool to address this problem. The administration changed the rules to allow employers to offer annuities within defined contribution plans, and to delay required minimum distributions (RMDs) to as late as 85 years old for deferred annuity holders.
Social Security benefits represent the largest source of income (40 percent) for retirees in every age group, according to the LIMRA study, The Retirement Income Reference Book 2015. In its annual report, the Social Security Administration predicted its old age and disability trust funds, combined, would be exhausted in 2033.
A Political fix might happen at some point, with most ideas pointing to a raise in the eligibility age for benefits. That could make it even harder for future retirees to remain independent and in charge of their retirement lifestyle.
The Center for Annuity Awareness is an independent resource to assist with retirement decisions and provides readers with unbiased information and tools. In addition, the Center gives consumers access to professional advisors who can help retirees in making important financial decisions about their future. It is more than just the money, it’s helping retirees to secure a lifestyle, peace of mind and maintain financial independence.
What Is An Annuity?
An annuity is insurance against living too long. Annuities insure your savings will last as long as you do – no matter how long that is. With an annuity you’re buying longevity income to insure your savings last your entire life.
People buy an annuity for peace of mind. Most of us have a parent, an uncle, or even multiple relatives, who have lived into their 90s. It takes a lot of money to live two and three decades in retirement. The No.1 fear among retirees is outliving their money. Annuities guarantee that won’t happen.
More information about Annuities will come next week. Stay tuned.