Annuity Buying Guide
This buying guide is intended to provide objective and actionable information for people who are or may consider purchasing an annuity.
The following are some simple points to consider:
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.
What Does $3 Million Buy
Submitted by tom on
$3 million in savings buys roughly $5,000 per month or $60,000 per year in inflation adjusted income.
This is inflation adjusted fixed income rather than annuity-based income.
Click here for more on TIPS and inflation adjusted retirement income.
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MetLife Study
Submitted by tom on
Metlife puts-out an annual employee benefit trends study.
Highly recommended--particularly for financial advisors who are focused on employee benefits and employer / plan-sponsor services.
Glossary:
Companies:
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Annuity Bankruptcy Protection
Submitted by tom on
One of the beneficial features of annuities is the potential for protection from creditors.
This discussion thread can serve as a Q&A for anything related to this issue.
One question that was presented by a site visitor is as follows:
Are "non-qualified" deferred annuities protected from creditors during bankruptcy proceedings in New York state?
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Are "non-qualified deferred annuities" protected from creditors in NY. (In Bankruptcy proceedings.)
Good question.
New York state insurance law does appear to exempt the proceeds of annuity contracts from creditors.
There are, however, clear exceptions to this rule.
Click here to look at the issue in more detail.
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