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The offering – aptly named the Lifetime Guaranteed Income Account – is from Mutual of Omaha, and it purports to guarantee that plan participants won’t outlive their retirement income. Underwritten by Mutual of Omaha affiliate United of Omaha Life Insurance Company, the new Lifetime Guaranteed Income Account (LGIA) is now available to plan sponsors and their plan participants nationwide as part of Mutual of Omaha’s retirement platform. According to the announcement, the new investment is designed to translate employee retirement savings into known guaranteed income for life. Tim Bormann, retirement plans product line director at Mutual of Omaha notes that while participants generally know what their retirement plan balance is, most still have no concept of how much retirement income it will generate. He says their goal in helping participants is to help that number be “known, shown, and guaranteed.” Three Common Pitfalls Bormann notes that the LGIA is designed to eliminate three of the most common pitfalls of retirement savings plans; the impact market volatility can have on a participant’s ability to accumulate sufficient savings (market risk), the possibility of a participant outliving their savings (longevity risk), and the impact a down market (particularly one at the time of retirement) can have on retirement income. The LGIA is positioned as an investment option in the retirement plan, and a credited rate of interest is applied to the balances invested there. The interest-crediting rate applied to the account is net of all fees, and the credited interest rate will typically be 0.5% lower than the rate credited to the Guaranteed Account.
The offering – aptly named the Lifetime Guaranteed Income Account – is from Mutual of Omaha, and it purports to guarantee that plan participants won’t outlive their retirement income.
Underwritten by Mutual of Omaha affiliate United of Omaha Life Insurance Company, the new Lifetime Guaranteed Income Account (LGIA) is now available to plan sponsors and their plan participants nationwide as part of Mutual of Omaha’s retirement platform. According to the announcement, the new investment is designed to translate employee retirement savings into known guaranteed income for life.
Tim Bormann, retirement plans product line director at Mutual of Omaha notes that while participants generally know what their retirement plan balance is, most still have no concept of how much retirement income it will generate. He says their goal in helping participants is to help that number be “known, shown, and guaranteed.”
Three Common Pitfalls
Bormann notes that the LGIA is designed to eliminate three of the most common pitfalls of retirement savings plans; the impact market volatility can have on a participant’s ability to accumulate sufficient savings (market risk), the possibility of a participant outliving their savings (longevity risk), and the impact a down market (particularly one at the time of retirement) can have on retirement income.
The LGIA is positioned as an investment option in the retirement plan, and a credited rate of interest is applied to the balances invested there. The interest-crediting rate applied to the account is net of all fees, and the credited interest rate will typically be 0.5% lower than the rate credited to the Guaranteed Account.
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