Reports in the NY Times, Wall Street Journal and Boston Globe this week drive home the message that the Obama administration has come to the conclusion that one of the easiest and most pragmatic ways to boost retirement savings and provide a more secure retirement income for American's is to encourage the use of annuities.
For those in the annuity business, particularly those who work in structured settlement annuities or work with lawyers on their pension plans, this comes as welcome news but no surprise as to the value of the annuity concept to lock in guaranteed income investors can't outlive, out spend or dissipate.
As we all know, American's have been in the thrall of the real estate and investment business for the last 25 years and believed numbers tossed around that 11% annual returns can be expected on equities long term or that no one ever lost money in real estate. As the last decade has shown, plenty of people can and do lose money in real estate and that while long term yields on equities over 50 years are quite predictable, 5 and 10 year periods can go negative much to the dismay of investors and advisers alike.
Listen in to this weeks edition of Speaking of Settlements to learn a bit more about the Putnam retirement Summit, the Obama administrations policy shift to encourage annuities and to get a handle on this sea change in how annuity contracts are perceived and used. As has been predicted by LBN commentator Mark Wahlstrom for over 18 months now; "we appear poised to enter a golden age in the use of and appreciation for annuities for the vast majority of Americans and the sooner advisers, lawyers and others get a handle on this the quicker these amazing and fundamentally sound products will gain wider use and acceptance."