Date posted: January 27, 2009
The Retirement Income Reporter recently published an article highlighting New York Life Insurance Company’s selling a total of $1.2 billion of income annuities during 2008.
- About $850 million was sold through New York Life’s own career agency.
- Over $100 million worth of AARP Lifetime Income annuity programs, which are provided by the company, were sold.
- Another $350 million of annuities were sold through partnerships with banks.
Date posted: January 23, 2009
Kimberly Lankford from Kiplinger’s has some advice for people who are considering cashing out their variable annuities that have lost money over the past few years: don’t, especially if your variable annuity has an income guarantee. When you cash out a variable annuity with a guaranteed minimum income benefit, you are only entitled to the current value of your investment; whereas if you keep it, you have the right to a yearly withdrawal of your initial investment (or even a percentage of the higher value, if it goes up).
Also, guarantees offered on today’s annuities tend to be far less generous than those offered in better economic times, Kimberly says. Be wary of cashing out if you think there’s a chance you’ll buy another annuity in the future.
Don’t forget the increased taxes you’ll have to pay on the entire annuity value if you cash out, as well as any possible surrender charges. Check with a financial advisor or other trusted source before making these decisions.
Date posted: January 22, 2009
In the Wall Street Journal, Anne Tergensen highlighted a new trend in annuities: longevity policies. Unlike standard annuity products, this investment only begins payouts at a certain advanced age (usually 80 or older). When payments do begin, annual payments are higher. As a result, you may be able to maintain a similar standard of living during your golden years. Due to interest compounding, you can amass a significant sum with a smaller initial investment than a regular annuity.
Unfortunately, buying a longevity protected annuity uses up a significant portion of your emergency savings. Also, you’ll lose most of your investment if you pass away before the bulk of the policy is paid out; just like traditional annuities.
These products are currently offered by MetLife, Hartford, and New York Life.