New York Life Insurance Co. has launched a new type of deferred income annuity designed as a “personal pension” and targeted at consumers concerned about outliving their savings.
The company says it designed the product in response to the waning of employer-sponsored defined benefit plans, noting that a new GAO report suggests that middle-income households without traditional pensions should consider using a portion of their savings to purchase an income annuity to help fund retirement and delay Social Security if possible. As example of how the Guaranteed Future Income Annuity works, a 54-year-old man without a pension can invest $10,000 per year for ten years. Starting at age 65, he will receive $9,500 per year for life, the company says.
“With the continued decline of traditional pension plans and concerns about Social Security, many Americans are facing a retirement income gap,” said Chris Blunt, New York Life’s EVP in charge of Retirement Income Security. “Like a pension, the Guaranteed Future Income Annuity ensures that retirement income will be guaranteed for life–not just a bet on future returns that may or may not work out.”
