Annuity FYI Blog

Where are retirees putting their money?  Currently, about $2.7 trillion sits in 401(k)s, while only $10 billion of fixed annuities were sold all last year.  Fixed immediate annuities will guarantee you a set income for life so here are 8 reasons people are not buying them and the reasons they should be, according to Scott Wooley at Forbes.com.

• Your financial analyst may not be selling you a fixed annuity because they won’t make much money off of you.  Bad for them, good for you.  Wooley says: “once a retiree buys an annuity, all he has to do is sit back and cash checks for the rest of his life.”
• People aren’t scared to live a long life.  Basically, since annuities pay money out for the remainder of your life, they are insurance against outliving your savings.  While people buy life insurance because they are scared to die, most people are not scared to live, but they should be prepared to live long.
• Following the prior point, retirees aren’t aware of their odds.  Odds are that they will live a long life.  More than 20% of 65 year olds will live into their 90′s and those living to age 100 are becoming commonplace.
• The stock market is calling out to people.  Unfortunately, if your retirement comes in a time like we are now living in, you are out of luck with a portfolio that has lost value.  Fixed annuities are a guaranteed income.
• Since women receive less per check than men do, it looks like they are getting shortchanged.  There is good reason though.  On average women live 3 years longer than men so they will collect money longer, adding up to equal or greater than what men will receive.
• It looks more expensive to purchase a couples’ annuity.  It actually makes sense though because whichever person lives longer continues to receive checks throughout their life.  With 2 people involved, there is a greater chance that at least one will live past age 90.
• Everyone wants to leave something to their heirs.  If a retiree annuitizes only the portion of money they will need for expenses throughout retirement, they can leave the remainder of their savings to heirs.  They can also purchase a “period certain” annuity that will continue to payout for a fixed time even if you die before that.
• No one wants to entertain the thought of living in poverty if they run out of money because they lived too long.  But it’s better to think about that possibility and plan for it now!

Transamerica Life Insurance Company has made positive changes to its variable annuity living benefit rider, according to the company’s press release May 1st.  These changes add new options to your investment choices along with the benefit of cost flexibility.  Transamerica says that the main structure of the rider has not changed.  According to executive vice president and national sales manager Dave Paulsen, “the new rider reflects our ongoing goal to offer industry-leading solutions while prudently and responsibly managing our business.”

Clients can now choose an open allocation option or designated allocation option.  Any investment opportunity available in the annuity can be accessed in the former.  The latter can be split up into any of 3 groups of investment options.  The best news is that you are not stuck with whatever option you choose because Transamerica allows switching between the two options.  An Annuity FYI expert can give you all the information you need to make an educated choice when looking at this and other annuity opportunities.

As you know, we regularly keep you updated as to exceptional fixed annuity rates. Protective Life’s keeps getting higher. They have just raised their ProSaver Platinum fixed rates — the 15-year rate is currently 5.60% for $100,000 or more (5.35% for less than $100,000). This rate is 2.43% higher than the 10-year treasury (as of end of day 5/01/09).  Protective may change their rates next week, so act now to lock it in!

Call an Annuity FYI Expert at 866 223-2121 for immediate assistance.

Click here to request information on this fixed annuity, or simply reply to this e-mail.

Click here to go to Annuity FYI’s Fixed Annuity page.

Brookings Institution in Washington is trying to persuade both employers and lawmakers that annuity products are critical to the future of 401(k) plans.  One of the main proponents of this “annuity initiative” is J. Mark Iwry, President Obama’s new deputy assistant Treasury secretary for retirement and health policy; according to Mark Bruno of Investment News.

Advocacy group The Retirement Security Project suggests that 401(k) participants be allowed to “test drive” annuities through different trial programs.  There is also chatter that the government should back annuities such as FDIC insurance backs bank accounts.  Iwry hopes that with these and other measures, making annuities part of 401(k) plans will help to increase the decline in equity markets.

The Profit-Sharing/401K Council of America claims that only 1/5 of companies are offering annuities in their retirement plans.  The perceived pricing and complexity have turned people off in the past.  However, employers can receive great pricing from the providers of annuities simply by increasing the number of users.  The Retirement Security Project’s plans for a trial program including deferred annuities seem to make for a winning situation for all involved.  Let’s hope that Iwry can get his “annuity initiative” to roll forward.

Are you interested in an Immediate Annuity?  Annuity FYI has a new Immediate Annuity Calculator.  This will allow you to get a quote by e-mail or phone, whichever you prefer.

An Immediate Annuity allows an investor to receive payments right away, or at a date set in the future.  This is great for the investor that needs the money coming in as soon as they invest.  Payments can be received over a certain time frame or for the rest of your life and can be fixed or variable based on the markets.

Contact Annuity FYI through the website or call an expert at 1-866-223-2121 for more information.