You don’t have to look too hard to realize the fix is in to put toxic annuities into retirement plans.
First, the Secure Act passes at the eleventh hour last year to allow annuities in 401(k)s (a terrible idea to begin with). Now, states want to require savings plans and you know the next step will be the annuity adoption. What a racket.
Bailey McCann reports for The Wall Street Journal:
According to data from the National Institute on Retirement Security, 59% of working-age people in America don’t have any money in a retirement account—whether an employer-sponsored 401(k) or an IRA—and aren’t covered by defined-benefit pensions. For those who do have a retirement account, most have balances smaller than their annual income. In other words, the average working American most likely won’t be able to maintain their current standard of living in retirement.
But several state governments are taking matters into their own hands. Ten states have passed legislation creating programs designed to get more people enrolled in retirement plans, and a majority of states are now considering such a program.
From CNBC back in January:
A new retirement law, the Secure Act, loosens rules around how employers can select annuity providers for their 401(k) plans. Only 10% of 401(k) plans currently offer an annuity. Other roadblocks to 401(k) annuity adoption, such as certain administrative issues, may prevent employers from adding annuities en masse.
Read more about the dangers of annuities here:
- New Wave of Annuities Likely to Fall Short of Investor Expectations
- Your Retirement Life: Run from Shiny Happy People
- Welcome to the Hotel California of Investments
- You Can Kiss Your Savings Goodbye if this Happens
- Is the World’s Largest Money Manager Pushing You into an Annuity?