In this week's "The FIDx Five," we focus on the top news items that stood out to us this week.
Revisiting the Post-Secure Act Annuity Option
The Secure Act was supposed to make it easier for traditional employer-sponsored retirement plans to incorporate annuities—but that was put on the back burner due to the pandemic. Is it finally time to re-evaluate annuities for 401(k) participants?
Source: ThinkAdvisor “Are Annuities Appropriate in a 401(k)?” 12/15/22
Hanging Them Up Sooner Than Later
A recent EBRI study shows that more than half of current retirees aged 62 to 75 surveyed retired earlier than planned. And only half of respondents are aware of annuities.
Source: InsuranceNewsNet, “Retirement Survey Finds More Than Half Retired Earlier Than Planned,” 12/12/22
Annuity Proponents and Opponents Share Their Thoughts
Amid high inflation and market volatility, annuities have been selling at historic levels. But whether those sales are good or bad for clients depends on whom you ask.
Source: Financial Advisor, “Annuities Are Popular Amid Volatility. But Critics Remain,” 12/8/22
Adjusting the Retirement Spending Rule
After last year's recommendation to keep withdraws closer to 3%, the traditional advice for retirees to spend near 4% in the first year of retirement is back. Morningstar is now recommending 3.8% for 2023.
Source: The Wall Street Journal, “The 4% Rule for Retirement Spending Makes a Comeback,” 12/15/22
High-Net-Worth Investors and Annuities
Maximizing after-tax gains, leaving more to heirs, offsetting inflation, and stabilizing portfolios during volatile times. Barron’s Penta recently discussed annuities for its target readership, who have assets of $5 million or more.
Source: Barrons, “Why High-Net-Worth Investors Are Paying More Attention to Annuities, 12/7/22
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