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Recent changes are making annuities hot again. At least that’s what the annuity sellers want you to believe. Some of the new annuity features are attractive. But others are just sales gimmicks. The biggest changes are in fixed annuities. The bear market in stocks initially drew investors to safer investments, such as fixed annuities. But […]
Equity indexed annuities are back. Sharp stock market moves seem to stir sales of these annuities. A strong stock market draws conservative investors to them, seeking higher returns than their fixed income investments. A bear market causes other investors to look for a safer way to invest in stocks. Unfortunately, few investors really know what […]
Regulators finally are focusing their efforts on some negative aspects of the variable annuity market that we’ve been discussing for years. Recently, several actions were taken by the National Association of Securities Dealers and the Securities and Exchange Commission. The NASD, which regulates its broker members, in April proposed new rules governing variable annuity marketing. […]
Some of the strongest opponents of the 2003 tax cuts were insurance companies. It’s no wonder. The new law significantly tarnishes the appeal of variable annuities and cash value life insurance. Market forces, meanwhile, are making fixed annuities less appealing to some investors. A variable annuity allows the owner to select how the account is […]
A key issue everyone faces is when to begin Social Security benefits. One aspect of this decision that is easy to overlook is how the choice could affect a spouse’s lifetime income. We’ve discussed when to begin Social Security benefits in past visits, most recently in the May 2002 issue (available in the Archive of […]
There’s a new top-seller among annuities. Buyers are flocking to the relatively new equity-indexed annuities. The last time these annuities were hot was in 1996-1997. At the time many investors had a lot of doubts about the stock market and were looking for a way to capture possible future stock gains without much risk. Insurers […]
Insurers always are coming out with gimmicks that aren’t all they initially appear to be. A good example is the new “no-fee” variable annuities. I’ve been among those who for years have said that the high expenses of variable annuities make them unattractive to those who won’t let the investment returns accumulate for at least […]
There’s at least one good effect of the 18-month bear market we’ve endured. Investors are taking a new look at some classic investment vehicles. For example, sales of fixed annuities are rising while sales of variable annuities are declining. I’ve long argued that most variable annuities are sold to the wrong people, and I’ve pointed […]