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The Market for Retirement Annuities (CRS Report for Congress)

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Release Date May 18, 2006
Report Number RS22439
Report Type Report
Authors Neela K. Ranade, Domestic Social Policy Division
Source Agency Congressional Research Service
Summary:

A retirement annuity allows an individual to purchase a regular payment stream from an insurance company to last his lifetime. Despite the ability of the product to eliminate the risk that a retiree will outlive his assets, few retirement annuities have been sold in the individual market. In addition, the number of individuals who annuitize their defined contribution retirement plan balances remains small. New products are emerging that would offer alternate annuity designs and make annuity prices more attractive. This report discusses legislation has been proposed in the 109th Congress that would enhance the tax treatment of annuities and encourage the growth of stand-alone annuity and combined annuity and long-term care products.