Inflation

Sales of variable annuity products in the United States cratered 27% during the first quarter of 2009. First quarter sales were $30.7 billion compared to $40.9 billion during the first three months of 2008. At the same time, sales of fixed annuities surged 74% to $35.6 billion. This is the first time since 1995 that sales of fixed annuities have exceeded sales of variable annuities for two straight quarters. This sales dynamic is not surprising and is largely a reaction to the market volatility...

Noted investor and publisher Marc Faber believes that the United States will ultimately experience inflation rates that approach the extremely high levels seen in Zimbabwe during the past year: “I am 100 percent sure that the U.S. will go into hyperinflation ,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates , they will be very reluctant to do so and so inflation will start to accelerate.” Faber has been a...

There are many concerns about inflation in light of recent government stimulus programs, but deflation can also be a concern for owners of annuities. In the UK, owners of inflation linked annuities are being impacted by the biggest monthly drop in the retail price index since 1948: "Standard Life has already written to its 25,000 customers with RPI-linked annuities to warn them that their income is set to fall, and similar annuities from Prudential will also pay out less." Source: Financial...

In the interest of considering the impact of deficit spending on inflation and inflation's impact on personal finances and retirement income : Total outstanding government debt in 2007 when Democrats took control of both the House and the Senate: $4.8 trillion. Projected budget surplus in 2019 if Congress had maintained the level of spending that existed when Democrats took power in 2007: $70 billion. Proposed spending increases between 2009 and 2018 in President Obama's May budget proposal: $5...

How much do I need to save for retirement? How do I plan for retirement? Both are pretty basic questions that are top of mind for most people who are at or approaching retirement age, and the uncertainty and anxiety around these questions have only increased in light of the financial crisis. A recent article lists 5 risks that should be on the radar of anyone contemplating retirement: Inflation Longevity risk Market risk Health problems and expenses Losing a job or unexpected retirement Source...