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.

Consider Inflation Protected Immediate Annuities for Estate Planning

Financial planning and estate planning have been brutally difficult over the past decade. High levels of market volatility , the possibility of deflation , and now threats of inflation have complicated the financial lives of millions of people. Almost anyone in or nearing retirement is faced with incredibly complex decisions. If, for example, you retired in 2000 yet remained fully invested in the S&P 500 you would have watched well over a third of your retirement nest-egg evaporate. Do you...

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Inflation Protected Immediate Annuity

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J.G. Wentworth Files for Bankruptcy - Life Settlements Market in Flux

A major player in the life settlement market has filed for Chapter 11 bankruptcy protection. On Monday, J.G. Wentworth and two of its affiliates filed for bankruptcy protection in a Delaware court. J.G. Wentworth had been very active in the life settlement market. The financial crisis has deeply impacted all securitization markets, and the life insurance market is no different. Life insurance policyholders who have already sold their life or annuity policies and received funds should be fine...

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Are Equity Indexed Annuities Really the Top Performing Asset Class Since 1995?

A recent article in Forbes magazine discusses the pros and cons of equity indexed annuities.

On the negative side the author makes a high level reference to costs and questions whether...

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Understanding the Basics of Annuity Fees and Expenses

A basic checklist from a top financial planner is worth a look if you are trying to understand the potential fees and expenses associated with annuities: The author considers the following: Annual contract charges Mortality and expenses charge (M&E Fee) Asset management fees Surrender charge Source: CNBC Full Story

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