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Retirement Planning Blog

in Annuity
on 04 February, 2021

annuities in low interest rate environment

Annuities can certainly strengthen your retirement plan even while interest rates are low. Among other things, they can add more predictability and stability to what you already have.

But what can you do when interest rates are at rock-bottom? In response to the economic fallout from the coronavirus pandemic, the Federal Reserve has dropped the target rate for its benchmark federal funds rate (its overnight lending rate to banks).

Now the target range for this rate is zero to one-quarter percent. The last time the Fed did this was during the financial crisis. In 2008, it dropped the rate to the same target range, and this didn't change course until December 2015.

The pandemic had an unprecedented impact on the economy. It put tens of millions of people out of work in just weeks and left many sectors basically on standstill.

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on 08 January, 2021

taxable vs tax deferred how taxes can affect growth

There are only two sure things in this life, and they are death and taxes. Taxes affect us at every turn financially, and investments are no exception.

The taxation of your assets can have a substantial impact on how much money you end up with. As any financial advisor will tell you, it's not what you make that matters, it's what you get to keep.

Increase Your Nest Egg with Tax Deferral

With that in mind, there are ways to increase the stockpile of savings that you have for your post-career lifestyle. ‘Tax-me-later’ vehicles can increase the amount of money that you have in retirement. In financial circles, this sort of vehicle is known as a tax-deferred asset.

In other words, it’s an asset where you don’t pay taxes on your money until you start making withdrawals from there. When you do withdraw money from this asset, you will pay income taxes on the withdrawn amount.

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on 27 January, 2021

bonds and cds pros and cons

Many financial advisors today tell their clients that once they reach retirement age, they should probably have at least some retirement savings housed in conservative, low-risk holdings. The question of how much money depends on many factors, including what someone’s personal risk tolerance is.

Often those holdings are made up of bonds, CDs, or other such instruments that don’t have the same volatility as stocks or stock funds do. That being said, these investments have their own set of pros and cons that can affect their performance over the long term. This is especially true when interest rates are low as they are now.

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on 06 January, 2021

banks vs insurance companies

Banks and insurance companies are two main types of financial institutions. But they both have key differences, including how they guarantee your money. That can be of importance for retirement savers as they strive to make confident, well-informed decisions about where they park their hard-earned savings.

Indeed, it’s not uncommon for this question of “banks vs. insurance companies” to come up when someone is exploring whether to buy a certificate of deposit or fixed annuity. For the reason, this article will focus on life insurance companies for the insurer side of the discussion.

Here’s a look at some of the core differences between banks and insurance companies, including how they back customer dollars with financial reserves of their own.

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in Annuity
on 20 January, 2021

annuities avoid probate

Estate planning isn’t likely to rank high on your list of fun things to do. Thinking about a post-death legacy and what you wish for loved ones probably isn’t high up there, either.

But having a proper estate plan is beneficial in many ways. It can ensure that your assets are distributed in the manner that you desire after you are gone.

Depending on the size of your estate as well as your state of residence, you may be facing estate taxes on your assets. There are ways that you can reduce that tax liability if you might choose so.

But one legal process can also derail your legacy wishes, tie up your assets for a long time, and lead to family drama that otherwise wouldn’t happen: probate.

The good news? One way that you can avoid probate on some of your assets for certain is if you have money in annuities.

With how they are treated under law, annuities exempt the money within them from this often time-consuming and drawn-out proceeding.

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in Annuity
on 04 January, 2021

enhanced benefits for annuities

Arguably the greatest benefit that an annuity can bring to a portfolio is protection. But depending on the contract you get, the annuity may provide enhanced protection for you in different qualifying circumstances.

These enhanced benefits can protect you against a number of financial risks. Those risks can range from confined care in a nursing home facility to home-based care and death benefit protection.

Some contracts have these as built-in features. In other cases, most enhanced benefits come as insurance contract add-ons, or annuity riders. Many of these enhanced benefit riders come at an additional charge.

You should be sure of what that enhanced annuity benefit specifically gives you, what it doesn't give you, how much it costs, and whether it truly makes sense for your situation before confirming any add-ons to your contract.

Even so, enhanced benefits can be a great supplement for the right financial situations. Here's how different enhanced benefits for annuities might help your retirement security in various situations.

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in Annuity
on 11 January, 2021

annuities creditor protection

Annuities are contracts between you and an insurance company. As the policyholder, you are entitled to certain guarantees provided to you by your life insurance company.

You can enjoy guaranteed income for life, guaranteed growth, guaranteed protection against market risk, or a guaranteed death benefit, among many other benefits.

Annuities also give the benefit of tax-deferred growth until you start withdrawing money from them. Not only that, annuities can also provide you with certain protections against creditors.

However, this helpful protection characteristic of annuities can vary by state. Here's a quick look at how annuities can offer various creditor protections if you are concerned about the exposure of your assets or money.

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on 15 December, 2020

average cd rates last 10 years img

Certificates of deposit, also known commonly as bank CDs, are one of the oldest and most traditional types of investments offered in America today. They are also among the most conservative investments in terms of loss risk. You can find CDs available at financial institutions such as banks and credit unions across the country.

While deciding whether to buy a bank CD has many factors to consider, the biggest one that CD customers look at is the annual interest rate that the CD pays. How much will your CD rate be? That will depend on a number of things, including how long you commit to keep money in the CD and how big your deposit might be.

Here's a quick rundown of the basics of CDs and a look at what CD rates have been over the past 10 years, from 2009 to 2020.

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on 12 January, 2021

5 tips to manage your debt in retirement

Editor's note: The following post has been contributed by Andy Masaki. Andy is a blogger and financial writer associated with the Oak View Law Group. He is a debt expert and a member of several online forums, where he shares his advice as well as tips to lead a financially independent life.

A recent CNBC report has revealed that the total debt burden of older adults in our country has ballooned by 543% in two decades. Isn’t it shocking enough?

Carrying debt into retirement can become an obstacle to your dream of relaxing during your golden years. Because after retirement, you are likely to have a limited income. Though you can increase Social Security payments by taking necessary steps, expenses may go up every year due to inflation, resulting in blowing your budget.

That means precisely, you are likely to struggle with your finances if you carry debts into retirement. So, it’s better to pay off your debts at the earliest and enjoy your golden years.

Here are some of the best possible tips that can help you manage your debt in retirement.

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on 08 December, 2020

11 steps to help you get ready for retirement

Retirement is a major event after many years of work. It marks the time when you end your career and begin the next chapter of your life.

But sometimes retirees discover that they haven't prepared as much as they could have for this transition. Just on the financial side, there are many pieces to set in place.

Those focal points range from ensuring you have enough retirement income to knowing what your post-career goals are and being ready for unexpected financial challenges.

You have worked hard to reach this point. Now it’s your turn to make the most of this point and enjoy the things that you may have delayed or put off during your working years.

Here are 11 steps that you can take to help ensure that you are ready for the big day when it finally comes. You can use these steps as a starting guideline for putting your retirement planning in order and being ready to enjoy your post-career lifestyle.

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