Deferred Annuity Payments Receive Tax Break from Small Business Jobs Act
Owners of non-qualified deferred annuities will benefit from a provision included in the recently passed Small Business Jobs Act of 2010.
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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.
Veritat Offers Comprehensive, Fee-Only Financial Planning Services that are Affordable and Scalable
Veritat is a start-up seeking to leverage process and technology innovation to scale a business model that is typically saddled with persistent and burdensome variable costs. If successful, Veritat will be able to deliver premium services to a mass audience.
As a registered investment advisor (RIA) that adheres to the fiduciary standard, Veritat provides comprehensive financial planning services through financial advisors who are employed by the company and share a common sense of mission.
We spoke with Dr. Kent Smetters who is the President of Veritat and a professor at the Wharton School at the University of Pennsylvania.
Annuity Digest: How did Veritat come into existence?
Dr. Kent Smetters:...
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Variable Annuity Sales in U.S. Post Largest Gain in Two Years
U.S. variable annuity sales totaled $35.5 billion in the second quarter of 2010. This represents an 11 percent increase from the same period in 2009, and the gain is the largest since 2007. Prudential was the leader during the period with $5.3 billion in sales--a significant increase relative to $3.38 billion during the same period the previous year. Variable annuity sales at AIG increased 45 percent to $1.58 billion. The largest U.S. life insurer, MetLife, had $4.5 billion in variable annuity...
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Deflation Concerns Gaining Traction as Economy Stalls
The consumer price index has fallen for two consecutive months: 0.2 percent in May and 0.1 percent in June. The unemployment rate in the United States remains at a persistent 9.5 percent, and in July the U.S. shed 131,000 jobs. Not exactly the type of news that supports a strong recovery or growth story. As discussed in a recent Wall Street Journal article , some large and very prominent investors are conditioning their investors and structuring their portfolios for deflation. PIMCO's Bill...
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Annuity Costs May Increase as a Result of Dodd-Frank Act
The financial system reforms imposed by the Dodd-Frank Act will likely result in a broad range of increases in the cost of financial services products. Similar to Sarbanes-Oxley, the regulatory costs of the legislation will ultimately be passed along to the buyers of financial services.
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