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.
Submitted by Anonymous on
Recent data from LIMRA that shows 2010 totals:
- Overall individual sales in United States
Submitted by tom on
There is an interesting op-ed in the New York Times (click here to read) that discusses the notion of a basic, inflation adjusted annuity issued and underwritten by the federal government.
The piece is written by professors at the University of Texas and Cal/Berkeley.
Submitted by tom on
An interesting paper (click here to read) from a a Milliman consultant on
Submitted by tom on
Another very interesting article from Leslie Scism of the Wall Street Journal (article can be viewed by clicking here).
A continuation of the discussion thread on low fee annuities that can be viewed by clicking here.
The Journal article discusses variable annuities and the impact that relatively inexpensive ETFs are having on product development.
Submitted by tom on
So what is the cost of having a retirement that is essentially free of financial risk?
