Retirement Income

Industry analysts view retirement income security as the hot-button issue that will be on the table once the healthcare reform issue has been resolved. Several recent surveys indicate how unprepared most Americans are when it comes to retirement income: A recent BofA Merrill Lynch survey revealed that 45% of those between the ages of 55 and 75 had not calculated how long their assets would last. Another survey by the Employee Benefit Research Institute indicates that 70% of people entering...

Two leading companies are partnering to provide a new annuity offering. MetLife has developed the "MetLife Growth and Guaranteed Income (MGGI)" product that will be distributed exclusively through Fidelity . The MGGI is a deferred variable annuity that contains a guaranteed lifetime withdrawal benefit ( GLWB ) that, depending on the age of the client, ranges between 4 and 6 percent of the initial single premium. Fidelity will manage a relatively simply fund offering and the M&E fees on the...

Gowri Shankar of the University of Washington has published an article on the use of Treasury Inflation -Protected Securities ( TIPS ) and longevity annuities. Shankar suggests that a combination of TIPS and longevity insurance provides an optimal strategy when the objective is guaranteed retirement income . Shankar demonstrates that the combination affords the ability to sustain relatively high withdrawal rates while minimizing the probability of financial ruin in retirement. The strategy also...

Putnam Investments President and CEO Robert Reynolds has been a consistently vocal advocate of retirement reform. Reynolds believes that the retirement planning landscape requires revamping so that annuities and other sources of guaranteed retirement income play a more prominent role. During a recent industry conference, Reynolds discussed the notion of a "product allocation" in the context of retirement finances: A crucial part of the reform effort is helping to protect workers` savings as...