Having drained Social Security and unleashed the hounds of Wall Street upon us, the criminals in Washington—who feel they’re entitled to seize everyone’s money—are greedily eyeing our 401(k)’s and IRA’s. The clueless American public probably won’t even flinch when control over these assets is seized.
Jan. 8 (Bloomberg) — The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
Annuities generally guarantee income until the retiree’s death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner, legislative counsel for AARP, said in an interview.
Read more at Bloomberg.com.
As it turns out, now may be the worst time to be converting 401(k)’s and IRA’s to annuities, as pointed out in this related commentary:
As a rule of thumb, the worst possible time to convert lump sum savings into a fixed income annuity would be when interest rates are historically low.
Although products may vary, this is roughly equivalent to buying long term bonds at a time when interest rates are likely to increase, substantially reducing your principal in real terms, and eroding your fixed returns through inflation.
For some reason the Obama Administration is promoting the idea now that there should be some encouragement for Americans to start converting their 401K’s and IRA’s into annuities, to provide themselves with lifetime income.
Read more at Jesse’s Café Americain.