Retirement

A recent Wall Street Journal article indicates that the number of government-backed reverse mortgages has increased 20% from the same period last year. This stands in contrast to the number of new home equity loans which decreased 70% from the same period last year. The increased interest in reverse mortgages is directly related to the fall-out from the financial crisis. Seniors who have suffered as a result of decreasing asset values in the capital markets see home equity as a potentially...

A House bill introduced by Representative Earl Pomeroy, D-N.D., would affect the tax treatment of certain annuities and income from IRAs. H.R. 2748, the Retirement Security Needs Lifetime Pay Act, would create a tax exemption for 50% of the income drawn from a non-qualified annuity. The exemption would be capped at $10,000 per year. The bill would also create a 25% tax exemption for income payments from an individual retirement account (IRA). Last, the bill would exclude the value of longevity...

As reported earlier , a new derivatives market is evolving to deal with longevity risk. Longevity swaps allow corporations and other pension plans owners to offload the risk of their plan participants living longer than expected. The market for longevity swaps, however, has been developing very slowly. Only one deal has taken place this year. Industry participants note that there is a slight backlog of deals and that roughly a half dozen deals should take place during the remainder of the year...

The Obama administration's budget proposal includes a provision for mandatory automatic enrollment in individual retirement accounts (IRA) or "auto-IRAs." The administration's intent with auto-IRAs is to provide a "universal" retirement savings system that is employment-based. Auto-IRAs would be mandatory for employers who do not offer a retirement savings plan--such as a 401k --to their employees. Administration officials suggest that such a system could impact up to 78 million Americans...