Annuities keep gaining respectability as a retirement solution

Your 401(k) plan would be annuitized for two years upon retirement, if the authors of "Increasing Annuitization of 401(k) Plans with Automatic Trial Income" have their way.

"Workers could opt-out at retirement or after those 24 months. But the authors expect that few would," said the Tax Policy Center's Howard Gleckman in "A New Annuity for 401(k)s." He concluded "the new scheme is a big improvement over what we have now" because it would provide a steady income stream similar to that from defined benefit plans.

Of course, noted Gleckman, post-retirement annuitization doesn't fix the problem that "all of the pre-retirement risk would be on workers, rather than their employers."

I've noted in "Annuities gathering steam in professional journals" that annuities seem to be gaining respectability as a retirement solution.


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Susan B. Weiner, CFA
Investment Writing
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