What to Know About the Annuities in Your 401(k)
No images? Click here By Brian Hershberg | April 17, 2022 Since the 2019 Secure Act opened the door to annuities in 401(k)s and similar workplace retirement plans, a confusing array of products have been put forth both within and alongside conventional funds in the savings vehicles. They come with such names as QLACs and deferred fixed income annuities and all provide some measure of income in retirement, which was the goal of allowing them into workplace plans. But they all come with a variety of trade-offs that affect returns, timing of distributions, and payment size—not to mention opaque fees and limited public information available for research. Reporter Lewis Braham took a look at the thicket of offerings and broke them down in his latest piece. Here's what he found on the aforementioned QLACs, for instance:
For more on the types of annuities you might find in your 401(k), please read: Should You Buy the New Annuities in Your 401(k)? What to Consider. Retirement Savers Need to Prepare for Meager Returns. Christine Benz Shares How.Morningstar's director of personal finance says that investors should make sure they have proper asset allocations and geographical composition, and that retirees may need to take lower withdrawals. Keep a Lid on Social Security Taxes and Medicare Costs. Consider Roth Conversions.Financial pros say savers early in retirement, young workers, and people between jobs might want to consider converting tax-deferred savings in 401(k)s to a Roth IRA to limit a variety of higher tax situations. Why an Increase in the Age for RMDs Could Trigger Higher Taxes for Some RetireesThe Secure Act. 2.0, which must still pass the Senate, would raise the age of beginning RMDs to 73 next year, 74 in 2030, and 75 in 2033. He Hit His Full Retirement Age. His Friends Tell Him to Claim Social Security. Here's His View.Living in Retirement: While experts generally say people should delay Social Security as long as possible, ideally to the maximum age, to get the biggest benefit, former journalist Tom Wilk finds when to claim is personal decision driven by many factors. Inflation Is Reminiscent of the 1980s. CDs and Savings Rates Are Not. Here's Why.While the Federal Reserve is raising its target short-term interest rate, experts don't expect yields on deposit accounts as quickly as rates on loans or as high as they once had. How to Choose Dividend Stocks for Retirement. And 12 Picks to Get Started.As more investors look to devote a portion of their nest eggs to the steady income that can come from dividend payers, financial pros share how to diversify holdings, seek downturn-resistant companies, and do due diligence on fundamentals.
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