LNC - These 2 Stocks Could Benefit From New Annuity Rules
One of the major elements of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which became law in January, is the provision that facilitates the inclusion of annuities in employer-sponsored retirement plans. What is an annuity? It's a contract between the investor and an insurance company.
How does it work? An individual invests a certain amount of money, and the company pays out income to the investor over an established period of time. Annuities are generally used as a retirement vehicle, with investors electing to receive a steady stream of income over time.
There are generally three types of annuities that investors can choose: fixed, variable, or indexed. A fixed annuity pays out a fixed rate of guaranteed income, while a variable one is tied to the performance of the stock market. An indexed annuity is tied to the performance of an index.