The only significant change in the latest retirement bill in the House backed by Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee, is an expansion of the 529 savings account, but other issues could be addressed later in the legislative process, said Dan Zielinski of the Insured Retirement Institute. The draft released Monday may not be "the end vehicle," he said.
Industry and consumer groups are attacking the National Association of Insurance Commissioners' proposed annuity sales rule. One critic said it doesn't tell agents how to comply, while another said it doesn't help regulators prevent the sale of annuities that aren't in consumers' best interest.
Wall Street banks are scrutinizing US financial and economic data for any early warning of a recession in 2019. JPMorgan Chase puts the odds of a recession next year at 35%, while Bank of America sees a 20% to 30% chance.
Proposals to impose best-interest standards on insurance agents could be taken up by as many as 14 states. "There's a narrative that we have to fix something but there's no evidence that there's something that needs fixing," AssessBEST CEO Kim O'Brien said.
Advisors who build and nurture strategic relationships with other professionals, such as accountants or lawyers, can get a "steady stream of high-quality clients," write Russ Alan Prince and Brett Van Bortel. They offer three steps for advisors to follow to achieve this goal.
Charitable gift annuities allow donors to receive annuity payments in exchange for a monetary or property donation to a charity, writes Brian O'Connell. Among the advantages are an immediate tax deduction and the potential for some of the annuity income stream to be tax-free, he writes.
Rep. John Yarmuth, D-Ky., who will likely become chairman of the House Budget Committee in January, will propose a plan to finance up to $300 billion of infrastructure projects through the sale of 40-year bonds. The bond proceeds would capitalize a newly created infrastructure bank.
The protections built into fixed-indexed annuities make them particularly useful to retirees when markets turn volatile, according to finance expert Dr. Wade Pfau. "This protection may make it easier to retire successfully in down market environments," he says.
Michael Babikian of LegacyShield says advisors need to "work together to encourage young adults to think about creating an estate plan." He offers five steps to walk millennials through, including drafting a will, listing usernames and passwords to online accounts, and choosing a power of attorney and health care proxy.
Among large 403(b) retirement savings plans, almost 90% offered fixed annuities in 2015, according to a report from the Investment Company Institute and BrightScope. The nonprofit institutions that sponsor 403(b) plans "recognize the importance of plan design and include features that will help attract and retain qualified workers," says Sarah Holden, ICI's senior director of retirement and investor research.
An IRI original research report, "Retirement, Income and Risk," found that only about one in six retirees relies on Social Security for more than half of retirement income, and two-thirds rely on an employer pension for at least 25% of their income. Due in large part to the security provided by pensions, most retirees with personal retirement savings are only tapping those accounts due to the legal requirement to take annual required minimum distributions (RMDs). Most workplace retirement plans today are based on defined contribution, such as 401(k) plans, as opposed to a pension with guaranteed lifetime income payments. Future retirees will be much more dependent on retirement savings for income and must plan accordingly.
An aging bull market, generational differences in retirement saving and planning, preventing fraud and protecting against the financial impact of long-term care costs. Check out the Fall 2018 issue of IRI Insight for important and thought-provoking analysis of these critical retirement issues. Also in this issue of IRI Insight: "Help Turn the Page on Unnecessary Retirement Risk," "Talking 'Bout the Generations," and "The Importance of Long-term Care Planning."