Guaranteed lifetime retirement income: the message in the bottle

That’s a picture of the oldest message in a bottle. It spent 92 years 229 days at sea according to the Guinness Book of World Records. A bottom drift bottle, numbered 423B, was released at 60º 50’N 00º 38’W on 25 April 1914 and recovered by fisherman, Mark Anderson of Bixter, Shetland, UK, at 60º 50’N 00º 37’W on December 10, 2006.

But in the 21st Century, the bottle numbered 401(k)/403(b) with the message inside of guaranteed lifetime retirement income doesn’t have 92 years to wash up on shore with solutions.

The need is obvious. Just consider the impact of the recent stock market meltdown and continuing economic problems on retirement savings and retirement dreams deferred.

The solutions are, of course, much more difficult to develop. While innovative retirement income products are being developed by the financial service industry, a recent study by Cogent Research titled In-Retirement Income indicates a vacuum in which retirement income products are simply not resonating with pre-retirees and retirees and no single provider stands out.

While we all waiting for the vacuum to be filled – and filled it will be – defined contribution plans like 401(k) and 403(b) are most likely the environment in which it will be happening. And that’s the starting point which our blogging buddy, attorney Bob Toth, spells out on his blog, The Business of Benefits which links to his recent BNA Tax Memorandum, Income Guarantees in Defined Contribution Plans.


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