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.

Variable Annuity Sales Decrease for Fifth Straight Quarter

Variable annuity sales in the United States decreased 24% for the three month period ending June 30. Total variable annuity sales for the second quarter were $31.9 billion, a 24% decrease from $42.2 billion during the same period in 2008. AIG and Hartford Financial Services Group were especially hard-hit with sales decreasing more than 50%. In contrast, sales at MetLife rose 27% to $4.5 billion, making the company the leading provider of variable annuities in the U.S. Source: Bloomberg Full...

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Inflation Protected Longevity Annuity

Submitted by tom on Mon, 08/24/2009 - 12:04

This post is a continuation of a question that was originally posted as a comment here:

http://www.annuitydigest.com/news/buffett-and-pictet-express-concerns-about-inflation#comment-119

The question is whether there are any advanced life deferred annuities that have inflation protection.

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Advanced Life Deferred Annuity

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Advanced Life Deferred Annuity

Buffett and Pictet Express Concerns About Inflation

Warren Buffett expressed his concerns about budget deficits and inflation risk in a recent New York Times op-ed piece. Asset managers at Pictet and Cie which is Switzerland's largest private bank also have concerns about inflation in the United States, and they are backing this view with part of the $60 billion in fixed income assets that they manage. Pictet is committed to periodic purchases of treasury inflation protected securities ( TIPS ) in light of their inflation thesis. Recent and...

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In-Plan Annuities

Submitted by Anonymous on Thu, 08/20/2009 - 21:54

Is there a technical difference between an annuity option that is offered by an employer once an employee reaches retirement age and an annuity option that is actually part of a

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Inflation Could Potentially Devastate Fixed Annuities

Rockingham Retirement, a British retirement income specialist, suggests that inflation could wipe out the spending power of UK pensioners who are receiving fixed income from standard annuities. The Financial Times Adviser article indicates that a 5 percent rate of inflation could erode 40% of the value of an 80,000 pound pension fund within 10 years. In 1975, following the early 70s recession, inflation shot up from 6.3 per cent at the start of the decade to 24.2 per cent. Five years later, in...

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