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
Does anyone have any thoughts or opinions on the effectiveness of the 4 percent rule to manage retirement spending / asset draw-downs?
With regard to an annuity, it will completely depend on the structure of the annuity contract and any additional riders that might be attached to that contract. At a basic level, the death value can be the initial deposit amount, less any withdrawals and market performance. Most of the bigger companies provide a somewhat enhanced death benefit. This usually is the initial
Thanks for reaching-out.
It is generally very difficult if not impossible to provide a simple yes/no answer to this type of question without having much more detail regarding your situation and needs. That said, here are some things to think about:
Submitted by tom on
Banks are a powerful source of annuity sales.
The most recent quarterly results for bank annuity sales was $582.6 million. This amount represents income from fees and commissions on product sales, and it is a decrease of 20.7 percent from the previous year's quarterly figure of $734.5 million.
Submitted by Anonymous on
Interesting article in Bloomberg about Wall Street's focus on creating products and funds to hedge tail risk or extreme downside exposure:
