InvestmentNews labeled Sen. Pat Toomey’s proposal to allow American consumers limited access to retirement savings to cover long-term care as one (among other) “ideas to raid retirement savings.” I don’t see it that way. Long-term care insurance covers caregiving costs due to an inability to perform activities of daily living or cognitive loss. Most Americans who experience such a loss first need care during their golden years. Without long-term care coverage, the cost of that care can wipe out a lifetime of retirement savings in short order. Long-term care insurance provides funds for caregiving that typically aren’t covered by Medicaid … Continue reading "Don’t Criticize Good Ideas to Ensure Retirement Security!"
I’ve read a number of stories recently critical of 403(b) retirement plans with annuities—which guarantee lifetime income. These stories typically note how fees in these arrangements “tend to be higher than in 401(k) plans.” With annuity guarantees, there’s a reason for that. Predating 401(k)s by two decades, 403(b) plans are named after a Tax Code section that actually has the word “Annuity” in its title. With tax deferred savings and participant directed investments, 403(b) annuities can get confused with 401(k) plans. However, 403(b) annuities offer more than just a way to invest. They provide guaranteed lifetime income in retirement, just … Continue reading "Why Are Annuities Different from Other Investments? Guarantees."
Did you catch the recent New York Times article featuring the summer’s best “beach reads?” Not surprisingly, there were no books about annuities on the list. That’s a shame, because Americans need to learn more about annuities, the only financial product in the marketplace that guarantees lifetime income. Fortunately, the Brookings Institution released three reports this summer about annuities: Can annuities become a bigger contributor to retirement security? Automatic enrollment in 401(k) annuities: Boosting retiree lifetime income Using behavioral insights to increase annuitization rates: The role of framing and anchoring The subject matter certainly isn’t typical beach reading material. But … Continue reading "Brookings Reports Contain Essential Lifetime Income Information For All Seasons"