Whether you’re a Republican, Democrat, or non-affiliated, it’s always interesting when the President of the United States weighs in, endorsing a particular financial product or strategy. Most Presidents, and many politicians in general, steer a country mile clear of such backing, but in his most recent State of the Union address, President Obama made a bold statement in support of one of the most effective financial solutions for generating retirement income – the traditional annuity.
“To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.”
The Obama administration will also be promoting the use of annuities to generate retirement income in upcoming proposals for helping stressed middle-income families. The administration’s plans include a proposal to encourage the use of annuities and similar products to transform savings into guaranteed future income, thereby reducing the chance of retirees’ outliving their savings or seeing nest eggs worn down by inflation or investment losses. These proposals were outlined in a fact sheet released by the White House just prior to President Obama’s State of the Union address.
The American Council of Life Insurers, Washington, has released a statement praising the administration’s plans and saying it is looking forward to working with President Obama and his administration on advancing the retirement security proposals.
“President Obama’s initiative recognizes a key challenge to Americans’ retirement security—
how to manage savings to last a lifetime,” ACLI President Frank Keating says in the statement. “The decline of defined benefit plans and emergence of defined contribution plans, such as 401(K)s, has shifted responsibility for managing savings from the employer to the individual.”1
So why exactly is the President of the United States so fond of annuities for retirees? Because he knows annuities are a product that can guarantee them a consistent retirement income.* With the future of Social Security more uncertain than ever before and guaranteed pensions and defined benefit plans becoming virtually obsolete, the reassurance offered by traditional annuities has become increasingly attractive. Now, please note: The fact that annuities offer guarantees does not make them the proverbial “silver bullet” for every individual’s situation. Beware of anyone telling you that any financial product is the “magic pill” for whatever ails you. However, the guaranteed income generated by fixed and fixed index annuities does make them a very suitable component for those who share one of the most common concerns of today’s retirees – the possibility of outliving their money.
So what’s the likelihood you’ll outlive your assets? Why spend another minute wondering? Retirement is supposed to be the culmination of all you’ve worked so hard for – not some doomsday you’ve fretted about all these years. Let us help ensure you’re on path to the retirement of your dreams!
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CLICK HERE for the NY Times article: “The Unloved Annuity Gets a Hug From Obama”
*Guarantees subject to the financial strength and claims paying ability of the issuing company.
1ACLI Lauds Administration For Plans To Help Americans Secure Their Retirements. February 2010.