Guaranteed returns in retirement savings plans: are they worth the cost?
Guaranteed returns in retirement savings plans: are they worth the cost?"
- Select a language for the TTS:
- UK English Female
- UK English Male
- US English Female
- US English Male
- Australian Female
- Australian Male
- Language selected: (auto detect) - EN
Play all audios:
SUMMARY OF PUBLICATION Several states have recently created state-sponsored retirement savings plans for employees of small businesses, and many other states are considering doing the same.
A key element in the design of such plans is the decision whether to provide a minimum level of guaranteed returns to savers. Continued concerns about retirement security—as well as
lingering apprehension from the 2007–09 financial crisis, which showed just how quickly assets accumulated over a lifetime can lose their value—are behind the desire for guaranteed returns.
Read the full report. Guarantees are a classic example of the economics dictum that it is impossible to get something for nothing. In principle, rate-of-return guarantees are simple: they
protect savers from losses and ensure that they receive a minimum return on their investments. In practice, however, guarantees raise a number of complex issues and are more costly than one
might think. First, someone—the saver, the plan sponsor, or the taxpayer—has to pay for the guarantee. When the government pays, it tends to severely underreport the real economic costs of
the guarantee in budget documents. Those costs are resources that must be forgone to finance the guaranteed return. Guarantees offered by private insurers reflect their true economic costs
more accurately, and they are often quite expensive. Second, the net benefits of rate-of-return guarantees may not be as obvious as they seem, because (a) markets often respond quickly and
(b) social security, Medicare, and housing constitute the majority of most people’s retirement resources. RELATED LINKS State Retirement Savings Resource Center
Trending News
Mysterious Northumberland landmark only accessed on foot named top 'hidden' gem | Chronicle LiveMysterious Northumberland landmark only accessed on foot named top 'hidden' gemA rather mysterious landmark in rural Nor...
Jordan henderson sunderland transfer verdict amid ajax speculationFORMER BLACK CATS STAR AND CHAIRMAN NIALL QUINN WOULD LOVE TO SEE HENDERSON BACK ON WEARSIDE CLIVE YOULTON 11:50, 28 May...
Two paedophiles jailed for sexually abusing girl they supplied with drugs and alcohol in Durham | Chronicle LiveTwo paedophiles jailed for sexually abusing girl they supplied with drugs and alcohol in DurhamLiam Ramsey and Stephen H...
How much luke littler will earn with premier league darts final repeatTHE PREMIER LEAGUE DARTS SEASON WILL CONCLUDE TONIGHT WITH FINALS NIGHT AT LONDON'S O2 ARENA, WHERE LUKE LITTLER WI...
Liverpool set for £85m deal for striker who rejected newcastle unitedTHE REDS ARE INTERESTED IN BRINGING HUGO EKITIKE TO THE PREMIER LEAGUE, THREE YEARS AFTER HE REJECTED A MOVE TO TYNESIDE...
Latests News
Guaranteed returns in retirement savings plans: are they worth the cost?SUMMARY OF PUBLICATION Several states have recently created state-sponsored retirement savings plans for employees of sm...
Pardon Our InterruptionPardon Our Interruption As you were browsing something about your browser made us think you were a bot. There are a few ...
Functional identification of microrna-centered complexes in c. ElegansABSTRACT microRNAs (miRNAs) are crucial for normal development and physiology. To identify factors that might coordinate...
Golden west chooses wallace for volleyballFormer Estancia High School and UC Santa Barbara volleyball standout Jon Wallace has been named men’s volleyball coach a...
Climate change archives - page 14 of 18 - factcheck. OrgFormer Vice President Al Gore said there has been an “88 percent growth in green jobs, year over year, over the past yea...