Annuities – what they are, how they work and how to choose the best type of Annuity
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An immediate annuity is a good part of many retirement plans. It provides guaranteed income for life, ensuring you won’t outlive all your money and will have a minimum income, in addition to Social Security. Some economists discuss a new reason to buy annuities. They call it dementia insurance. Everyone, as he or she ages, […]
The hottest offering in guaranteed lifetime income plans now is the guaranteed lifetime withdrawal benefit (GLWB). This is a rider to variable annuity policies, and it also is available on some other insurance offerings. GLWB resurrected variable annuity sales after stocks crashed in 2008 and now is attracting even conservative investors. The rider is so […]
The Fed’s zero interest rate policy and some other factors have been hard on insurers, especially those who sell annuities. They can’t promise the guaranteed income they used to when short-term interest rates are near zero and long-term rates are less than 4%. As a result, a number of firms have exited the business or […]
I’ve often pointed out that people can build their own indexed annuity, receiving most of the benefits of commercial annuities at less cost, to the consternation of some insurance agents. Yet, you can use strategies similar to those used by insurers to generate the same guarantees and returns in your own accounts. You don’t have […]
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Variable annuity sales sagged after the 2000 stock market crash. They were restored after the industry developed “living benefits.” There are different versions, but they generally guarantee the account owner a minimum rate of return or lifetime income in return for higher fees. The annuities have their advocates and detractors, and they continue to fight […]
Annuities changed a lot in the last year. If you’re considering an annuity based on what was available a few years ago, you aren’t likely to find the features you’re looking for. Even many of those who own annuities are likely to have seen changes in their contracts. Low interest rates, volatile equity markets, and […]
Which is better: an immediate annuity or a bond ladder? I’m asked that frequently these days, and the frequency increases as more Baby Boomers inch closer to their post-career years. First, let’s define terms. A bond ladder is constructed by purchasing a portfolio of bonds that mature in different years. The simplest ladder is equally […]
Protect my principal, and guarantee my income. Those are the goals of many investors today, especially those in or nearing their post-career years. Now that the equity markets no longer are rising steadily upward, investors aren’t looking for ways to match or beat the indexes. They’re looking to protect the nest eggs they’ve worked hard […]