An annuity—such as an immediate annuity—that is purchased with a single premium payment.
Duration is a measure of the time associated with cash flows or payments from a bond. Duration measures the amount of time (in years from the purchase date) required for a bond owner to receive interest and principal payments that are equal to the cost of the bond.
Long duration bonds have payments that are spread-out over a relatively long period of time (e.g...
Conventional financial wisdom says that bonds should comprise an increasing percentage of a portfolio as the owner ages and heads into retirement.
In theory, a retiree’s need for income and a reduced tolerance for risk are the main drivers of the larger allocation to bonds.
A key consideration, though, is...
Inflation protection for fixed annuities would seem to be a sensible consideration given the fact that central banks around the world are doing everything they can to reflate in the wake of an historic deleveraging.
After all, the worst possible place to be if and when inflation does kick-in is on the receiving end of nominal (not adjusted for inflation) fixed payments, and most fixed annuities fit this description perfectly.
While the inflation protection makes sense in theory, it turns-out that inflation-protected annuities may not be so sensible in practice....
The Lifetime Income Disclosure Act introduced by the U.S. Senate last year would require...
