Retirement Income

Employers who offer 401k plans seem intrigued by the notion of providing an annuity option to employees who participate in the plans. Recent stock market volatility makes the prospect of stable, guaranteed income very attractive in theory: Given the stock market’s volatility, Silgan is one of a number of 401(k) plan sponsors seriously discussing adding an annuity option to their 401(k) plans. With most employees’ 401(k) accounts decimated, the idea of providing guaranteed post-...

A recent Wall Street Journal article indicates that the number of government-backed reverse mortgages has increased 20% from the same period last year. This stands in contrast to the number of new home equity loans which decreased 70% from the same period last year. The increased interest in reverse mortgages is directly related to the fall-out from the financial crisis. Seniors who have suffered as a result of decreasing asset values in the capital markets see home equity as a potentially...

An annuity ladder basically involves spreading annuity purchases over time. For example, instead of taking $100,000 to purchase an immediate annuity today, a person might purchase five different $20,000 annuities over a seven year period. This approach has a number of advantages: The approach helps avoid the risk of purchasing an annuity at a less then optimal time--for example when interest rates are very low. In this sense, it is somewhat similar to dollar cost averaging when investing . The...