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 tom on
A Federal appeals court recently voided Rule 151A.
Rule 151A would have treated indexed annuities as securities and would therefore have shifted responsibility for regulation of indexed annuities from state departments of insurance to the Securities and Exchange Commission (SEC).
Submitted by tom on
It is reported that asset manager BlackRock has created a target date fund offering with an annuity for defined contribution pension plans.
Submitted by tom on
Sequence of returns risk is something that anyone remotely close to retirement or recently retired should be thinking about in light of constant capital market volatility.
