Annuity

An annuity comes in many forms, but a simple definition is that an annuity is a contract that converts a sum of money into a series of periodic payments for an agreed upon period of time. An annuity can be thought of as a financial vehicle that converts a pool of money into a stream of income. Annuities are most useful in addressing the financial planning needs of people in or approaching retirement. Annuities are unique in the financial world because they can provide protection against the risk or outliving one’s assets (longevity risk) by guaranteeing income payments in perpetuity or any other selected amount of time. Annuities can be viewed as a type of personal pension plan. Social Security is similar to an annuity in that money contributed over the course of one’s working years is converted into a series of periodic payments that provide income during retirement.

Boring and Conservative are the New Darlings of Wealth Management

A recent Wall Street Journal article discusses the renewed focus on conservative and rather boring investment options among the wealth management community. In the wake of extreme capital market volatility during the past couple of years, wealth managers have returned to basics in their discussions with current and prospective clients. Among the more mundane options that are frequently discussed are: Annuities, and in particular fixed annuities. Bank deposits. Dividend paying stocks. Face to...

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Investing in Longevity Risk

Longevity risk has existed as an asset class for quite some time but has primarily been the focus of larger institutions. In a recent Financial Times article, the author discusses the recent proliferation of longevity and mortality related investment products. The range of product options include: Life settlements, blocks of annuities, reverse mortgages and life tenancies. Longevity/Mortality swaps. Structured notes, including pass-through, principal protected notes, coupon protected notes and...

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Variable Annuities, Financial Planning and Human Capital

Although mentioned previously , it is worth noting again that Moshe Milevsky is the most active, creative and interesting voice in the asset decumulation industry. Moshe produces copious amounts of outstanding materials that shed light on the world of annuities for both professional and consumer audiences. A recent interview in The Journal of Financial Planning is highly recommended. Moshe is working on a soon to be released book on lifecycle investing . In the Journal of Financial Planning...

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Annuity Sales Down 17% in Third Quarter to $181.6 Billion

Sales of individual annuities in the United States decreased for the third straight quarter. Total individual annuity sales for the first nine months of 2009 were $181.6 billion. Fixed annuity sales continued to decline at a rate of 19% compared to the same period the previous year. Variable annuity sales were hurt by a significant downturn in Section 1035 exchanges as carriers have been scaling-back on product features while increasing prices. Source: Wall Street Journal Full Story

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Annuity

Fixed Annuity

Variable Annuity

Section 1035 Exchange

1035 Exchange

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Annuity Sales

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Annuity

Fixed Annuity

Variable Annuity

Section 1035 Exchange

1035 Exchange

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Annuity Sales

Annuities Figure Prominently in the Pending Retirement Income Security Debate

Industry analysts view retirement income security as the hot-button issue that will be on the table once the healthcare reform issue has been resolved. Several recent surveys indicate how unprepared most Americans are when it comes to retirement income: A recent BofA Merrill Lynch survey revealed that 45% of those between the ages of 55 and 75 had not calculated how long their assets would last. Another survey by the Employee Benefit Research Institute indicates that 70% of people entering...

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