Retirement experts Mark Warshawski and Gaobo Pan find that annuity values can be broadly applied to retirement income strategies
WASHINGTON , Oct. 29, 2024 /PRNewswire/ — New research from economist Mark Warshawski, principal at ReLIA, shows that strategic pensions and planned withdrawals can be tailored to individual needs, preferences, and market conditions. Balance is the Key to Optimal Retirement Outcomes Strategies, former Deputy Administrator for Retirement and Disability Policy at the Social Security Administration (2017-2021), currently a Senior Fellow at the American Enterprise Institute, and Mr. Gaobo Pan, Director of Zilore LLC. This research was supported by the American Council of Life Insurers (ACLI).
This study realistically captures the many uncertainties faced by retirees, including investment returns, inflation, longevity, and other personal circumstances, as well as the pricing of investment and annuity products purchased at retail stores and institutions. It’s being modeled. The findings reveal important insights for the future of Americans’ retirement security.
A planned withdrawal strategy that combines liquid investments or cash savings with an annuity is better than other strategies for people retiring with $250,000 or more in savings. Whether it’s a one-off purchase of an immediate annuity or a step-by-step annuity process. The common 4% rule is problematic. While this rule provides flexibility, it provides a minimum level of income with a high failure rate for seniors, with an initial withdrawal of 4% of assets and then indexed to inflation each year. Conversely, annuities provide a guaranteed lifetime income and protect against market volatility and longevity risk. People with less than $250,000 in retirement benefits benefit most from annuitizing a larger portion of their savings, if not all of it. Overall, annuities can maximize a steady stream of income, reduce stress on remaining non-annuitized assets, and accommodate asset growth.
“The situation surrounding retirement has changed significantly in recent years, with a shift from reliance on traditional defined benefit plans to defined contribution plans and individual retirement accounts. “There are no built-in tools for people to know how to best structure the funds they withdraw on a regular basis. They are living in retirement, and pensions fill that gap,” says Mark, co-author of the white paper.・Mr. Warshawski said. “To explore the right combination for partially retired people, and how annuitization overlaps with Social Security, other investment options, and different types of employer pensions and retirement plans, further research is needed. Research is needed.”
“The research in this paper has important implications for policymakers and financial advisors who advocate for policies that support flexible mixed-income strategies. They also educate retirees about the benefits of diversifying their retirement income sources. It also emphasizes the importance,” Warshawski said.
ACLI supported Warsawski and Pan’s research. Responsibility for the paper rests solely with the authors.
As the retirement landscape continues to evolve, ACLI remains at the forefront, committed to supporting strategies that not only meet retirees’ financial needs but also improve their quality of life.
To learn more about the role of life annuities in your retirement income strategy, read this white paper. Additional information about this study and other ACLI research projects can be found at the ACLI Research Hub.
Mark J. Warshawsky is a senior fellow at the American Enterprise Institute (AEI), focusing on Social Security and retirement issues, pensions, long-term care, disability insurance, and the federal budget. Prior to joining AEI, Dr. Warshawski served as Deputy Administrator for Retirement and Disability Policy at the Social Security Administration. Previously, he served as a member of the Social Security Advisory Board, vice chairman of the Federal Long-Term Care Commission, and assistant secretary for economic policy at the U.S. Department of the Treasury, where he played a key role in developing economic policy. He is the inventor of the LifeCare Annuity, a product that combines immediate life annuity and long-term care insurance benefits. A popular speaker, Dr. Warshawski frequently testifies before Congress. He is the author, co-author, or author of eight books, including Retirement Income: Risks and Strategies (MIT Press, 2011) and Fundamentals of Private Pensions, 9th edition (Oxford University Press, 2010). I am a co-editor. He holds a PhD in economics from Harvard University and a BA in economics from Northwestern University.
Gaobo Pang is a seasoned financial services executive who leads and strengthens organizational capabilities in research, analytics, algorithms, optimization, and prototyping, and develops technology-enabled planning and investment solutions with expert guidance. We are jointly pursuing innovation to Previously, he served as Head of Quantitative Strategy at Smart USA, where he oversaw quantitative ideas and strategies in technology-enabled solutions for lifelong financial planning and investment management, led optimization methodologies and algorithms, and and built a prototype of the platform innovation. Gaobo won the Best Paper Award for his work “Risk Management and Insurance Review” and was a finalist for the TIAA Paul A. Samuelson Award for Outstanding Academic Paper on Lifetime Financial Security. Ta.
The American Council of Life Insurers (ACLI) is the leading trade association promoting public policy and advocacy on behalf of the life insurance industry. 90 million American households rely on the life insurance industry for financial protection and retirement security. ACLI member companies are dedicated to protecting the financial well-being of consumers through life insurance, pensions, retirement plans, long-term care insurance, disability income insurance, reinsurance, dental, vision, and other supplemental benefits. . ACLI’s 275 member companies represent 93% of the industry’s assets in the United States.
Subscribe to Impact | Follow us Twitter | Connect with us on LinkedIn | Like us on Facebook
National Council of Life Insurance Companies | 101 Constitution Avenue, NW, Suite 700 | Washington, DC 20001-2133
Source American Council of Life Insurance Companies
Want your company’s news featured on PRNEWSWIRE.COM?
Over 440,000
newsroom and
influencer
9k+
digital media
outlet
Over 270,000
journalist
opt-in
