Income Annuity Decision: Start Now or Wait Until Later?

Fewer workers expect traditional pensions when they retire these days, yet most also are acutely aware that longevity is rising–and that they run the very real risk of running out of money at an advanced age. These concerns have boosted awareness of the importance of optimizing Social Security and have sparked growth of a relatively […]

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Longevity risk: Making money last as long as you do

How long should you plan to live? No one can really know, of course. But the answer to that question may be the most critical factor in making a successful financial plan for retirement. Expected longevity for men and women at age 65 has jumped more than 10 percent since 2000, according to the Society […]

Fed rate hike: Start of something good for retirees?

The interest rate hike announced today by the Federal Reserve is a major milestone for retirees, who have been caught between a rock and hard place ever since the Great Recession, with zero interest rates and higher-than-average inflation. The Fed’s quarter-point hike in the benchmark federal funds rate is the first in nearly a decade, […]

QLACs: A New Tool for Retirement Income

Is there a QLAC in your future? Not disability insurance from that noisy duck of TV-ad fame, but a qualified longevity annuity contract. QLACs are a new form of deferred income annuity (DIA) promoted by the Obama administration as a way to address longevity risk–the risk that you’ll run out of money in retirement. The […]

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A new type of annuity for life’s biggest unknown

How much money you will need to save to enjoy a secure retirement depends on the ultimate unknowable: How long will you live? The possibility of running short is called longevity risk, and the Obama administration last year established rules to foster a new type of annuity, the Qualified Longevity Annuity Contract (QLAC), that would […]

Longer life expectancies raise the bar on pensions

Americans are living longer. That’s good news for people–but it’s creating challenges in the world of traditional defined-benefit pensions. American men are living an average of two years longer than they were in 2000 (the last time the tables were revised), and women are getting an additional 2.4 years of life, according to new mortality […]

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Retirement planning for singles: Three must-do items

If retirement planning had a soundtrack, a great candidate would be “Love and Marriage,” the old Sammy Kahn lyric made famous by Frank Sinatra: Love and marriage, love and marriage . . go together like a horse and carriage . . . So much planning advice focuses on married couples–and no doubt, that’s where some of […]

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Why 401(k)s won’t offer longevity annuities anytime soon

Longevity risk – that is, the risk of outliving your retirement savings – is among retirees’ biggest worries these days. The Obama administration is trying to nudge employers to add a special type of annuity to their investment menus that addresses that risk. But here’s the response they’re likely to get: “Meh.” The U.S. Treasury […]

Seven questions to ask about annuities

I wrote recently about the sales traction that insurance companies are getting with deferred income annuities, or DIAs. In this post, I’ll consider the pros and cons of using a DIA as part of a retirement portfolio plan, and expand the conversation to include the DIA’s first cousin: single premium income annuities, or SPIAs. We’ll […]

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Deferred income annuities getting some traction

You’ve probably seen this attention-grabbing advertising message on television or on a billboard: “The First Person To Live To 150 Is Alive Today.” Not surprisingly, the ad comes from an insurance company–Prudential–and the pitch is for annuities. You may find the message optimistic, unsettling, or just plain disturbing–but it does highlight the insurance industry’s core […]