Retirement Planning Blog

Millions of Americans depend on annuities for retirement saving, protection, and income. If you are considering an annuity for retirement, the right annuity contract can help make a difference in you reaching your goals. But first, you need to make sure that an annuity truly fits your financial situation and objectives.

The search starts with making sure that you have a solid insurance company issuing your annuity contract. Why is this so crucial? Read More

Does it make sense for you to buy an annuity at age 60? How about when in your 60s in general?

It really depends on the annuity and what it would do for you. An annuity should solve specific problems in your retirement plan and cover any gaps with its contractual guarantees.

Tens of millions of people depend on annuities and their guaranteed promises for retirement. While you may be considering an annuity while in your 60s, the ages of those who buy annuities tend to be across the board.

Some buy fixed-type annuities in their 40s so they can accumulate money alongside retirement accounts or an employer plan. Others use annuities for income in their 70s, or even later, so they have dependable guaranteed cash-flow. Several annuity buyers fall somewhere in between those age ranges.

Now, what situations might make sense to purchase an annuity in your 60-somethings? Read More

Are you looking at different annuity rates for your retirement goals? Generally speaking, an annuity rate is the percentage at which money inside an annuity grows annually. While a majority of annuity rates have to do with growth potential, not all rates do.

Many advertisers push different annuity rates online, but these rates can have different meanings. Those rate distinctions differ largely along the various types of annuities and what each type offers to you.

Some annuities, like immediate annuities, will give you rates that are tied to income payouts. Since immediate annuities are designed to pay you income right away, that makes it pretty straightforward. Other annuities are more ‘income for later’ and come with rates like “payout percentages” depending on the type of payout option you choose.

Annuity rates usually vary from one life insurance company to another. What’s more, rates are tied to current interest rates. So when current interest rates change, annuity rates tend to move with them. Read More

Do you have a variable annuity and are you looking for alternatives to it? Not sure about what other options might make sense for your situation?

Many people buy annuities for different retirement goals, but variable annuities are often bought more than other types of annuities. However, this might well change in the near future. What is driving this shift is that people are on the lookout for alternatives to variable annuities.

Why? Variable annuities offer the most growth potential of all annuities. But they also have the most exposure to market risk.

What’s more, while this isn’t universally true for all of them, many variable annuities are also fee-heavy and expense-heavy.

According to the SEC, just one annual charge for life insurers managing longevity risk – called a mortality and expense charge – can add up to 1.25% per year in variable annuity contracts. Other research by groups like Morningstar has also found that cumulative fees and expenses in a variable annuity can be in excess of 3 percent.

Depending on their needs, people may be interested in alternatives ranging from annuity contracts with less market risk to financial vehicles that aren’t even annuities at all. Read More

Where do you find independent annuity advice that you can trust? Just mention the topic of annuities, and you certainly won’t have any shortage of opinions coming out of the woodshed.

Many financial advisors and pundits are in the pro-annuity camp due to the strong contractual guarantees that only annuities give. On the other hand, annuity naysayers point to a few things, such as sometimes overly aggressive sales pitches, to make their case of annuity pessimism.

So, how can you find independent annuity advice that is somewhere in the middle: objective, honest, and focused on helping you become educated and make a well-informed decision? A good source will give you, among other things:

• Clear and publicly available information on annuities without any obligation on your part to access it
• The fundamentals of annuities and their role as the foundation of an overall retirement plan
• Straightforward questions to ask about annuities you may be exploring
• Upfront points on what annuities can do and what they can’t
• Clear outlines of the different annuity pros and cons
• Opinions on who is a good candidate for an annuity (millions of people, but not everyone)
• Clearly spelled-out details of the strong point of annuities – protections stemming from their guarantees – and what they can do for you

In other words, a credible source of annuity information will be upfront and clear about what annuity contracts can achieve – and also not accomplish – for you. Read More