Owners of Variable Annuities Shielded from Market Crash

A recent Wall Street Journal article notes that owners of variable annuities with guaranteed living benefits ( GLB ) have been largely immune to the fallout from the financial crisis. "One of the best investments of the past decade was one of the most derided: the variable annuity ." The protection offered by GLBs such as the guaranteed minimum withdrawal benefit is discussed. "Because of such guarantees, many holders of variable annuities actually saw their accounts increase 6% or more in...

Listen to Zvi Bodie When it Comes to Retirement Planning

Zvi Bodie is absolutely one of the most honest and refreshing voices in finance and economics.  Professor Bodie also happens to be an advocate of life-cycle investing.

A recent interview with Bodie is highly recommended and available in U.S. News & World Report.

Highlights from the interview include:

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Chief Investment Strategist from TIAA-CREF -- Think of Income When Considering Annuities

Annuities are all about producing income that will last according to P. Brett Hammond. Hammond is the chief investment strategist for TIAA-CREF asset management. In Hammond's view wealth creation and asset accumulation are fine, but producing income should be front and center when thinking about retirement: There's nothing wrong with wealth creation. In fact, it's fabulous. But the problem is if you're only thinking about wealth creation for retirement income, you may forget about all the other...

Sales of Variable Annuities Uncertain as Insurers Modify Products

Life and annuity insurers have been revamping their variable annuity product offerings to better fit a post financial crisis environment. As discussed in recent blog entries , variable annuity product revamps basically boil down to increasing prices and benefit reductions. The unanswered question is what impact the product changes will have on variable annuity sales. According to a recent Wall Street Journal Article, variable annuity sales grew at an 11% annual rate from 1995 through 2007...

A Changing Variable Annuity Landscape -- What to Watch for in the Next Few Years

This is the second part of an interview with...