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.

Annuity Digest Site Redesign

Annuity Digest Visitors:

This week AnnuityDigest.com has been re-launched with a new and improved design. Whether you are a first time visitor or check-in frequently, the new look is meant to make your time on the site more valuable.

Annuity Digest was launched over a year ago to address a perceived need in the area of quality annuity-related content. Considering and purchasing an annuity is a complex process, and a lack of objective, third-party resources makes the process even more challenging. Annuity Digest hopes to fill this void by offering credible, authoritative insight into this important financial services sector.

To that end, the site has been redesigned to bring to life what I see as the most compelling and actionable content on the site –...

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Retirees Suffer in Current Low Interest Rate Environment

Financial Times personal finance columnist Matthew Vincent discusses the challenges that retirees face in the current economic environment. The gist of the story is that these are brutal times for savers who need to generate interest income to fund current spending needs. In other words, these are brutally difficult times for many retirees.

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GlaxoSmithKline Purchases Bulk Annuity Contract for Pension Plan

The Trustees of the GlaxoSmithKline pension plan have entered into a bulk annuity purchase agreement with Prudential UK. GlaxoSmithKline ("Glaxo") will purchase bulk annuities from Prudential to cover approximately 15 percent of its UK defined benefit pension plan. The total value of the transaction is estimated to be approximately 900 million pounds Sterling.

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Breaking-Down the Annuity Expense Criticism

Coverage of annuities by the broader financial media tends to be negative, with much of the criticism focused on annuity expenses.

The criticism is typically accompanied by a blue-sky investing scenario that makes the case for annuities that much less compelling. The theoretical...

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New York Life Reports Record Sales of Fixed Immediate Annuities

New York Life Insurance Company reported record sales of fixed immediate annuity products for the third quarter of 2010. The nation's largest mutual life insurer reported $1.3 billion in fixed immediate annuity sales--an increase of 4 percent over the same period last year. According to EVP for Retirement Income Security Chris Blunt: “We’re on pace to achieve a seventh consecutive year of record sales of lifetime income annuities. Americans are more actively taking personal...

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Fixed Immediate Annuity

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