Sign of the Times

A 'grey market' phenomenon in more ways than one, Airbnb’s lodging website allows Boomers and others to boost their retirement incomes and, conversely, to afford their dreams of retirement travel.

Research Roundup

We summarize four recent papers: 'Portfolios for Long-Term Investors,' 'What is the Value of Annuities?,' 'Public Economics and Inequality: Uncovering Our Social Nature,' and 'Financial and Total Wealth Inequality with Low Interest Rates.'

An Annuity’s ‘Moneyness’? There’s an App for That

How will variable annuity contract owners use their income benefits? That question is vital to annuity issuers and to fiduciary advisers with clients who own VAs. This Texas Dep't of Insurance actuary knows a product that can help them find out.

A Chip Off the Old Rock?

Bloomberg reported this week that Prudential is considering selling its retirement plan recordkeeping business. Prudential didn't confirm the report, but several industry insiders did. Low interest rates, high costs of IT makeovers, and sticky stable value fund guarantees are driving the move, RIJ was told.

VA Sales Lack Clear Trend

Helped by a bull market that pushed the DJIA over 15,000 for the first time, VA assets under management at the end of the first quarter 2013 reached a new record of $1.72 trillion, up from $1.64 trillion at the end of 2012.

VA Issuers Keep On Tweakin’

Carriers filed 97 VA product changes in the first quarter of 2013, down from 101 in the fourth quarter of 2012 and 59 in Q1 of last year. Benefits continue to shrink and volatility controls on subaccounts have become more common, according to Morningstar's Annuity Solutions product manager.

A retirement boom as far as the eye can see

“Financial services firms should be looking at the retirement market not just for the immediate opportunity offered by Boomers but preparing for the possibility of long-term, sustained growth as Gen X and Y consumers prepare for retirement,” a LIMRA release said.

GAO criticizes “pervasive marketing” of IRA rollovers

Posing as plan participants about to change jobs, the GAO called IRA rollover counselors at 401(k) providers to see if the recommendations were biased in favor of rollovers and against roll-ins to the job changer's next employer's 401(k) plan. (Pdf and video attached).

DIA-monds in a rough patch

“Deferred income annuities were a bright spot in a difficult quarter,” said Jeremy Alexander, CEO of Beacon Research. “Ongoing product development and increasing sales underscore the importance of generating guaranteed retirement income for consumers and their advisors.”

Quote of the Week

"Selfish and contentious people will not cohere, and without coherence nothing can be effected" -- Charles Darwin, Descent of Man and Selection in Relation to Sex (1871).

The Bucket

Brief or late-breaking items from DST, BB&T, and Vanguard.