There has been plenty of buzz about the future of social security in recent times. Many are starting to see a trend in social security that makes it seem unlikely that the popular benefit could continue. It is unclear exactly what needs to be done in order to save the system, but one method that has been offered as a possible solution is to use variable annuities or similar products to save it.
Variable annuities are investments that are deferred until later in the future. People use this type of investment in order to take advantage of some tax deferred income and grow their money over time. If the social security system were to use variable annuities like this, then it could potentially push the issue a long way down the road. Some even claim that this restructuring could help to save social security altogether because it would create a new way of giving people their benefits.
Variable annuities are already popular products among those who are nearing their retirement. The stability that annuities provide to their holders is undeniable. At the same time, many enjoy the fact that they are able to profit even when the market is down.
Having social security switch over to some system of variable annuities is unlikely to happen quickly. This whole idea would have to go through many different circles of important people who help to make policy changes like this happen. If the idea does gain steam, then it has the possibility to change the whole face of this popular social contract.
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