Weblog
Sunday, 24 July 2011
-
Annuity Rates - GAO: Annuities
Social Security benefits provide annually inflation-adjusted income
for life--and in 2008 were on average the source of 64.8 percent of
total income for recipient households with someone aged 65 or older.
[Footnote 8] Under changes legislated in 1983, the retirement age for
an unreduced benefit (the full retirement age) is gradually increasing
from age 65, beginning with retirees born in 1938, and will reach age
67 for those born in 1960 or later.[Footnote 9]Despite these changes, the cost of Social Security benefits is
projected to exceed sources of funding, and the program is projected
to be unable to pay a portion of scheduled benefits by 2036.[Footnote
10] In 2010, for the first time since 1983, the Social Security trust
funds began paying out more in benefits than they received through
payroll tax revenue, although trust fund interest income more than
covers the difference, according to the 2011 report of the Social
Security trust funds' Board of Trustees.[Footnote 11] However, changes
to Social Security could eliminate or reduce the size of this
projected long-term shortfall.At retirement, DB plan participants are eligible for a specified
payment for life (either immediately or deferred, and with or without
benefits for a surviving spouse), but some DB plans also give
participants a choice, sometimes a difficult choice, to forego a
lifetime annuity and instead take a lump sum cash settlement
(distribution) or roll over funds to an IRA. DC participants face a
number of difficult choices regarding their account balances, such as
leaving money in the plan, purchasing an annuity,[Footnote 12] or
transferring or rolling over their balance into an IRA. Employers who
sponsor qualified plans and enable departing participants to receive
lump sum distributions must also give participants the option to have
these amounts directly rolled over into an IRA or another employer's
tax-qualified plan.[Footnote 13]
AnnuityRates
-
- Member Since: 7/24/2011
