Annuity

Year after year, many Americans are finding it harder to provide for their spouses during retirement. Guaranteed pension payments have been disappearing as more companies move toward 401(k)s and other savings plans. And with the end of file-and-suspend in Social Security, numerous couples now can’t use the higher earner’s wage record for greater benefit payouts.

This brings up the question of survivorship: How can retirees ensure their spouses receive sufficient income for current and future needs? Many couples have turned to joint life annuities as a long-term solution.

However, that doesn’t mean that a joint life annuity is right for everyone. In some cases, having separate annuities can be more prudent. Or it may be appropriate to seek retirement income strategies with other means. But no matter what, whether someone should choose a joint life annuity or a few single life annuities will vary on an individual basis. It depends on the potential buyer’s needs, goals, and situation, among other factors.

If you are considering a joint or single annuity, here are some pointers to help you think about your options.  Read More

People who own annuities have something that not only can take care of their financial needs, but also provide money even after their death. In addition to benefits for owners, an annuity can be a valuable inheritance for beneficiaries, like spouses, or other persons. Certain benefits can become available to beneficiaries when a contract owner passes away. 

As the contract holder, you may setup your annuity in ways that will take care of your loved ones, even when you are not with them anymore. The amount of money available after your death will depend on the type of death benefit offered by the specific annuity you have. Let’s get into more details of what happens to an annuity when someone passes away. Read More

Are you considering different annuity options for your retirement portfolio? An annuity is a type of insurance product, purchased from a life insurance company and/or an annuity company. Annuities are popular retirement options due to the safety they offer for your money, the potential for tax-deferred growth, and their reliability for giving permanent, lifelong income.

That being said, sometimes it can be confusing when you try to make sense of different annuity types, contract features, benefits, and downsides. Since you would commit a sum of your money to an annuity contract for a period of time, it’s prudent to do research and develop an understanding of your annuity options before committing to any financial decision. Here is a short guide to help you get started on understanding the different annuity options. Read More

Are your retirement nest eggs secure? Have you considered what happens to your hard-earned savings after you’re gone? One question often looms large for retirees and those planning for retirement: are annuity death benefits taxable?

The short answer is: it depends. Annuity death benefits are taxed as ordinary income, but the specific tax treatment depends on whether the annuity was qualified (funded with pre-tax dollars) or non-qualified (funded with after-tax dollars). For qualified annuities, the entire amount is taxable. For non-qualified annuities, only the earnings portion is taxable.

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As you plan for retirement, selecting the right annuity type — whether a qualified vs non-qualified annuity — can shape your financial security in significant ways. When you understand the implications of each type, you can optimize tax advantages and income benefits. 

In this article, we’ll talk about a qualified vs non-qualified annuity. This can help you make informed decisions that align with your retirement goals and financial objectives.

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Have you ever heard of a market value adjusted annuity? If you are planning for your retirement income, then you may be considering an annuity as one of your options. Of course, there is a number of possibilities when it comes to purchasing annuities. So, it is important to understand clearly what annuities are so you can make sound financial decisions.

In cases when you are looking for tax deferral and an instrument which can offer safe growth and reliable future income, a fixed annuity can be the perfect option. These typically entail an average contract of seven to twelve years and guarantee a minimum annual interest rate. While the duration of the contract and interest rates are important to consider, you should also take into account whether the annuity is subject to a Market Value Adjustment (MVA). It’s common for an MVA to be attached to fixed annuities, and as you probably noticed, it’s these contracts with an MVA that are called “market value adjusted annuities.”

Before making a decision, it’s important to know what a market value adjusted annuity is. So, let’s get into it. Read More

Do annuities make sense for your retirement portfolio? Well, when used right they can be a very powerful financial vehicle, especially for retirement. Annuities allow an investor to pay a lump sum of money upfront and then receive an income stream in return for a set period of time. The insurance company is bound to provide this income stream by contractual guarantees. The income stream can last anywhere from a set duration to a lifetime.

Here’s a quick look at some annuity basics and other helpful tips to consider. Read More

After years of hard work, all of us want a comfortable retirement. But it may be unclear as to what we need to achieve this. What steps are necessary for a worry-free financial life – the ability to spend with confidence?

Part of it means a transition in thinking. In real-world terms, it encompasses a shift in focus from asset values to monthly income. We want to be sure we have sufficient cash-flow for funding a retirement lifestyle. On the other hand, we should also be attentive to the matter of preserving wealth. With all those savings accumulated over many years, our money will now need to last for the rest of our lifetime.

However, this doesn’t mean that savings growth has to be put on the back-burner. For Americans looking for “safe money financial” vehicles, annuities may be attractive. In particular, fixed-type annuities can offer guaranteed lifelong income, tax-deferred accumulation, and growth via guaranteed interest rates or rising index values.

If you are investigating fixed annuities or fixed index annuities for personal growth or income goals, here’s a quick look at a few variables to consider. Read More

As many of us know, October is the renewal month for many bank certificates of deposit. Some common selling points for bank CDs are low risk and steady earning potential. But today’s low interest rate environment throws some real curveballs for retirement savers.

In fact, CD rates have remained low for some time now. And what interest rates might be in the future still remains unclear. With the diminished prospects for wealth accumulation, many people seek an alternative to bank CDs and their low yields.

When used properly, annuities are often tapped as transfer-of-risk strategies. Many Americans rely upon them for lifelong income security, dependable asset protection, or other financial assurances. Nevertheless, annuities of the fixed variety – particularly fixed index annuities (FIAs) and multi-year guarantee annuities (MYGAs) – can also offer value as tax-efficient savings vehicles.

If you are looking for alternatives to CDs, here’s a quick look at fixed index annuities and multi-year guarantee annuities – and how they can differ from today’s low-yield bank CDs as retirement-savings solutions. Read More

Record numbers of Americans are retiring. According to the U.S. Census Bureau, there will be over 80 million retirees by 2040. Life expectancies are on the rise – people are living longer. And a large proportion of Americans worry about market risk. They get anxious over how the stock market performs or fear potential losses.

Because of these and other reasons, some Americans have been adopting annuities as transfer-of-risk strategies. They want the guarantees associated with these contracts – particularly the assurance of lifelong income, for many annuity buyers. For those of us worried about outliving our money or other income-related risks in retirement, this raises an important question: “Should an annuity be part of my income strategy?”

It’s indisputable that many Americans desire guarantees in their financial plan, and this number continues to grow. But that doesn’t mean annuities are right for everybody. If you are wondering whether an annuity is for you, here’s a quick look at some situations you may want to consider. Read More