“People are living longer, the stock market is erratic, Social Security goes only so far, and guaranteed pensions are an endangered species. Is there any safe way to make sure your money lasts as long as you do in retirement?”
Leonard Weiner
US News & World Report, October 2001.
“[M]any of us will live beyond what was once considered the normal retirement age, surviving to celebrate our 100th birthdays and beyond. One long term consequence ... is that it will become increasingly challenging to maintain decent standard of living during such a long retirement period.”
Olivia S. Mitchell and David McCarthy
Wharton School, University of Pennsylvania, June 2002.
“Financial planners report much confusion about retirement finances among many working people. Some concerns are longstanding -- for example, how to convert assets into enough income to cover lifetime expenses. ... Meanwhile, increasing health care costs, longer life expectancies and some lingering unrealistic expectations about investment returns make it difficult for some investors to get these complex retirement decisions right.”
Elizabeth Harris
The New York Times, January 4, 2004.
“Figuring out how to allocate your money over your retirement years is very complicated thing to do. There are two types of risk: You may spend your money too fast and outlive your resources before you die, or you may spend too slowly and deprive yourself of an adequate level of support.”
Alicia Munnell, Ph.D.
Boston College Center for Retirement Research, Kiplinger’s Personal Finance, August 2002.
“[M]any Americans live paycheck to paycheck and have not developed budgeting skills. Yet when they reach retirement age, we expect them to competently manage sums of money far larger than they are likely to have had access to while they were in the labor market. It is unrealistic to assume that most such people can develop new budgeting and management skills at retirement age.”
Dallas Salisbury
Employee Benefit Research Institute, November 2001.
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About Social Security
“Prospective baby boom retirees may assume that their children will always pay the costs of federal retirement programs. This may be an illusion.”
Robert J. Samuelson
The Washington Post, January 7, 2004.
“[T]he dramatic demographic change is certain to place enormous demands on our nation’s resources – demands we almost surely will be unable to meet unless action is taken.”
Alan Greenspan
Chairman of the Federal Reserve, before the U.S. House Committee on the Budget, 2004.
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About the Volatility in Financial Markets
“[T]he average household faces a loss of 43% of its retirement income as a result of recent declines in the stock market. ... It will take the average household over 30 years to recover the wealth lost in 2000 and 2001. ... [R]elying on financial markets to generate adequate retirement savings within the existing institutional framework will most likely not work.”
Christian E. Weller
Economic Policy Institute, August 2002.
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About Annuities
“There’s a way to virtually ensure that you’ll always have money coming in no matter how long you live, and that’s to buy an annuity.”
Walter Updegrove
Money, May 2004
“Immediate annuities can accomplish something that no other investment can: guarantee that you won’t outlive your income, no matter how long you live.”
Kimberly Lankford
Kiplinger’s Personal Finance, March 2004.
“An annuity and an investment are really two different things. You don’t buy an annuity just to make money. You buy it to make sure that when you’re 97 years old you have income coming in.”
Prof. Olivia S. Mitchell
Wharton School of Business
“Annuities like Social Security provide insurance against longevity risk – that is, the risk of outliving personal resources. ... [A] life annuity provides payments for as long as the annuitant is alive and protects against longevity risk.”
Congressional Budget Office
February 1998.
“Few seniors are aware of how annuitization, the trading of assets for a guaranteed stream of payouts, can help guard against outliving the planned asset program. And it is necessary to increase consumer awareness of how long-term care, annuities and other financial products can fit with a sound retirement strategy.”
Hon. Richard Baker (R-LA)
Chairman of U.S. House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, 2003.
