Annuity News

Boston University economist Zvi Bodie is as candid as ever in a recent interview published in Money Magazine. Bodie believes that the vast majority of consumers have been deceived by conventional financial advice: The standard models that are used to give investment advice to millions of Americans are fundamentally wrong. We're told that over time, stocks get less risky, but that's bull. Stocks are always risky -- whether in the short or long run. Prices dropped by 37% last year. While...

A recent article on retirement planning discusses the profound impact that health events can have on retiree assets. A retirement income study by the National Bureau of Economic Research indicates that the association between health and retirement assets is "striking:" People in the bottom 20 percent of the population in terms of their health had median assets only half those of people in the top 20 percent when the research period began in 1994. When it ended 12 years later, the least-healthy...

The World Economic Forum--in partnership with Mercer and the OECD--delivered its findings from a two year study on the future of the pension and healthcare financing systems in ageing countries. A Mercer article discussing the research can be found by clicking on the "full story" link at the bottom of this post. Longevity risk and the role of private annuity markets are discussed, as are the potential longevity risk-mitigating effects of longevity-indexed bonds. Source: Mercer Full Story

Officials from the Departments of Treasury and Labor want annuities to be a default option for workers who participate in employer-sponsored retirement plans such as 401ks. At a recent industry conference, Treasury senior advisor Mark Iwry spoke of creating annuity -based lifetime income options within the defined contribution 401k arena. Issues such as credit risk and portability continue to present obstacles to progress. Employer fiduciary liability with respect to in-plan annuity selection...