It's Tax and IRA season, time to evaluate your retirement accounts.
Stock Markets may be moving higher anticipating the end of American Socialism, but an interesting twist has come out of Washington.
The Obama Administration's Middle Class Task Force has reported that the annuity offers a better shot at a more secure retirement.
The annuity is an Insurance contract purchased with a lump sum in exchange for a monthly check.
A big fear during retirement is running out of money.
The Annuity can guarantee that won't happen and can fill gaps left by retirement accounts.
President Obama didn't discuss annuities per se but the mere mention by his task force was enough to excite Insurance executives.
"I never thought I'd have the president as a wholesaler for us," said Christopher O.
Blunt, a New York Life Insurance executive VP as interviewed by The NY Times recently.
The White House announcement demonstrates the administration desire to promote "annuities and other forms of guaranteed lifetime income.
" Nothing is simpler as the basic fixed immediate annuity (also known as a single premium immediate annuity) that delivers a regular check for life.
Presidential attention contrasts from prior negative news on the complex and high costs of Variable annuities.
The Securities and Exchange Commission has extensive warning documents on its Web site for investors considering the variable variety.
However low costs associated with Fixed and Indexed annuities may be another factor in its recent success.
First-time deposit can earn a bonus of 3-15%.
Income growth of 7-8 % and guaranteed life time income payouts are available.
A recent House bill called for waiving 50% of the taxes on the first $10,000 in annuity payouts each year.
These benefits and Tax incentives may also explain recent popularity.
Never put all your eggs in one basket, but the annuity could be used to cover basic expenses or pay for long-term care insurance, defraying huge nursing home costs.
Could you, without help from a broker or financial planner do better? Maybe, but a guaranteed monthly income is a comforting factor, especially when investments suffer from fluctuations.
All of that makes basic annuities the ultimate test of risk aversion.
If you get an annuity, you and your heirs may have less money than if you'd kept your retirement savings in investments.
Then again, if you guarantee enough of your retirement income, you - and those same heirs - won't have to worry about how you're going to meet your basic needs.