Income

The U.S. life insurance industry--which includes companies that provide annuity -based products--has stabilized somewhat during 2009. Conning Research predicts net after tax statutory income of $16 billion in 2009. This is despite $20 billion in capital losses for the industry in 2009. Annuities were the most painful and volatile segement for insurers, producing a $4 billion loss in the combined 2008 - 2009 period. Much of this came from losses on living benefit guarantees associated with...

Elizabeth Warren recently wrote a rather extraordinary piece on the hollowing of the American middle class and the need for a Consumer Financial Protection Agency (CFPA). Consider the following: 1 in 5 Americans is unemployed or underemployed. 1 in 9 American families cannot make the minimum payment on their credit card. 1 in 8 mortgages are in default or foreclosure. 1 in 8 Americans is on food stamps. More than 120,000 American families are filing for bankruptcy every month. When adjusted for...

Larger 401k accounts (in excess of $200,000) dropped 25% on average in 2008. 95% percent of participants in defined contribution style 401k plans would pursue a "cash out" option if offered--essentially taking the lump sum of accumulated assets rather than an option to turn that pool of assets into a guaranteed stream of income. Only 25% of participants in defined benefit pension programs would accept the same lump sum "cash out" offer.

In January 2010, many investors who had previously been prevented from considering a Roth IRA conversion because of income limits will be able to consider converting to a Roth IRA. Asset manager Charles Schwab recently published a useful list of tips that are worth considering in light of the Roth IRA conversion opportunities. Much of the content naturally focuses on tax considerations and differences between traditional and Roth IRAs. Source: Charles Schwab Full Story

Industry analysts view retirement income security as the hot-button issue that will be on the table once the healthcare reform issue has been resolved. Several recent surveys indicate how unprepared most Americans are when it comes to retirement income: A recent BofA Merrill Lynch survey revealed that 45% of those between the ages of 55 and 75 had not calculated how long their assets would last. Another survey by the Employee Benefit Research Institute indicates that 70% of people entering...