The Obama administration will promote use of annuities to generate retirement income when it releases 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.
The proposals were outlined in a fact sheet released by the White House in advance of President Obama's State of the Union address. Obama is set to give the address Wednesday.
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."
Other initiatives outlined by the White House document include:
- Increasing the clarity of 401(k) plan fees.
- Encouraging retirement plan sponsors to give workers access to impartial retirement advice.
