3 Ways to Guarantee Retirement Income for Life

There are plenty of terms to know when it comes to retirement. It seems that annuity is one that isn't as readily known or deeply understood. Here is a crash course to help you plan better for your retirement.

Mar. 27, 2015 Kiplinger

Annuities can be a tough sell. Retirees and those approaching retirement worry that they will die long before they recoup their investment. Add to this concern the years of low interest rates and the industry’s reputation for high fees, and it’s not surprising that annuity sales are relatively flat.

But the annuity industry is convinced it can attract a growing wave of baby boomers who remember all too well the 2008 market downturn. Insurance companies are rolling out a variety of products that they contend address the baby boom generation’s desire for flexibility and choice — as well as a need for guaranteed lifetime income.

And it’s likely that many retirees will give annuities a second look following the federal government’s decision to give some products a thumbs-up. The Treasury Department in July changed the tax rules so people can invest some of their 401(k) and IRA money in certain types of annuities without having to take required minimum distributions on the money.