The Department of Labor and the Department of the Treasury (the “Agencies”) are soliciting comments whether the agencies could or should enhance the use of lifetime income or other arrangements designed to provide a stream of income after retirement.
One of the questions is related to reverse mortgages:
What are the advantages and disadvantages of approaches that combine annuities with other products (reverse mortgages, long term care insurance), and how prevalent are these combined products in the marketplace?
Why the sudden interest in how the government can enhance the use of lifetime income arrangements?
The New York times recently reported that the Obama Administration is promoting annuities as a tool to give Americans a better shot at a more secure retirement.
A report from the administration’s Middle Class Task Force states it’s looking to promote “annuities and other forms of guaranteed lifetime income.” According to the Times, the statement suggests the administration is open to other solution that delivers a regular check for life.
At the moment its not clear how the administration plans to promote these types of products. Carmen Effron of C.F. Effron Co. LLC in Weston, Conneticut told Financial Planning that at the very least, she said she expects they will create educational material to inform individuals about the differences between fixed and variable annuities.
“The reality is, it would really surprise me if the government pinpointed particular companies to buy from,” she said. “But, they might—like they did with HSAs— put together a ‘preferred’ group of insurance companies that meet their standards.”
With the administration’s decision to make other forms of guaranteed lifetime income a bigger priority there has to be a way for a reverse mortgage to play a role in the initiative.