Some might feel that the practice of continuing to feed tax-deferred retirement funds such as 401(k) plans in an economy where taxes are expected to rise is a bit like buying tickets on a ship that has already sailed and then hoping they can pay extra to rent a paddle boat to try to catch up. We should take note of recent government action that is designed to charm the masses of people who are concerned about dwindling balances in retirement funds and worried about the likelihood of having enough money available to make retirement possible.
Allowing annuities as a choice in retirement fund options is not new, but recent regulations make the process of aligning annuities as a portion of the retirement investment package a more transparent option, giving investors the ability to keep their money in the tax-deferred funds while segregating a portion of the investment into a fixed income annuity. The process is not cut-and-dry, as there are complicated rules determining at what age an annuity payment would begin, what portion of the fund could be allocated in this direction, how the provider can insure against a poor economy, and what would be the appropriate cost for this option. I believe anything that encourages saving is a positive move. Whether this is a viable alternative remains to be seen, but choice is good and annuities provide a security blanket that few other investments can offer.
Perry is a CPA and a former senior tax accountant with Big Four firm Deloitte. She maintains a small tax practice, she is a personal finance instructor, and the author of thirty books, including Surviving Financial Downsizing: A Practical Guide to Living Well on Less Income (Adams Media); QuickBooks on Demand (Que); Excel 2007 Macros Made Easy (McGraw Hill); The Complete Idiot's Guide to Doing Your Income Taxes (Alpha/MacMillan); and, most recently, Mint.com for Dummies (John Wiley & Sons). In addition, she is a former columnist for the Indianapolis Star and Indianapolis News daily newspapers.
Perry is a nationally recognized speaker who advises public accountants on using Internet tools to improve their accounting practices. She also taught a college-level introductory accounting class and was on staff at the Indiana CPA Society as a computer applications instructor. For five years, she was a contributing editor for Accounting Today magazine before taking over the helm at AccountingWEB.
Perry is a graduate of Indiana University where she earned a bachelor’s degree in journalism. She returned to school to study accounting at Illinois State University, passed the CPA exam (in one sitting!), and worked for Deloitte in the Chicago tax department.
Gail has been named one of the 25 Most Powerful Women in Accounting by CPA Practice Advisor magazine and the American Society of Women Accountants.