Vanguard launched an online service that allows individuals to compare income annuities from different insurance companies.
Vanguard Annuity Access is designed for individuals seeking a guaranteed stream of income in retirement to augment their retirement savings and Social Security benefits.
Vanguard said the service can be attractive to retirement plan participants rolling their assets over to an IRA as they retire.
Through the platform, clients can gather customized quotes on a real-time basis and evaluate competitively priced, directly comparable contracts from multiple companies.
“Traditionally, annuities have been viewed as complex products that were sold and not bought. Vanguard Annuity Access brings the tools and transparency to the annuity-buying process, enabling self-directed individuals interested in a ‘paycheck for life’ option to make an informed decision," said Tim Buckley, a managing director in Vanguard’s retail investor group.
Buckley said the platform complements Vanguard’s retirement options, which include systematic withdrawals from a diversified portfolio of low-cost Vanguard mutual funds, Vanguard Managed Payout Funds, and retirement income plans developed by a certified financial planner.
Vanguard Annuity Access will be offered to participants as an IRA rollover option.
“More than 80% of retiring participants in Vanguard-administered DC plans leave their employer’s plan within three years, typically for an IRA rollover account. As a result, our plan-sponsor clients are interested in an “outside-the-plan” guaranteed income program,” said Barbara Fallon-Walsh, head of Vanguard Institutional Retirement Plan Services. “Many plan sponsors offer the Vanguard Financial Plan service for their participants aged 55 and older, which provides them with free access to a CFP who can help them with retirement income planning. Vanguard Annuity Access represents an additional service they can offer participants entering retirement.”
Vanguard provides recordkeeping and investment services to 3.5 million participants and 1,700 plan sponsors in more than 2,500 defined contribution plans.
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