I have been touting the potential value of annuities for some time now. While they aren’t for everyone—and the context of individual and family economic and personal circumstances is a critically important variable to deciding whether or not an annuity makes sense as part of your retirement financial planning—they are, in my opinion and in the opinion of a not inconsiderable number of other financial advisers, an underrated piece of the wealth management puzzle. Now, according to an article I recently read, it seems that perhaps even the United States government is starting to come around to my way of thinking: Uncle Same has discovered annuities!
Various government officials, including both regulators and elected representatives, have begun to extol the virtues of annuities as an effective was to resolve a structural problem in the way retirement plans are set up: people are simply living too long. It’s been my experience that, in the past, the government (like the vast majority of financial advisers) looked at annuities as some form of tax-deferred smoke-and-mirrors vehicle for the wealthy—but, really what they are is insurance: a policy that protects against the possibility of you “outliving” your money.
I can’t see government officials talking more positively about annuities (even promoting them) as anything other than a positive development. I hope they continue to catch on, as they can be a great way for retirees to provide themselves with an additional measure of financial/retirement certainty in today’s increasingly uncertain economic climate.