Annuity FYI Blog

According to “New York Life revamps sales team” by Jessica Toonkel Marquez of Investment News, New York Life Insurance Co. has added specialists and reorganized its management team to help wholesalers.  They want to make it simpler for the wholesalers to sell the best annuities, mutual funds and other guaranteed-income products to financial advisers.  Each of the product categories has new specialists supporting the sales teams.  New York Life has also made the switch to have their relationship management teams organized by client instead of product.

Having only one person as a company contact throughout the “entire product solution suite” will make the process easier for wholesalers and their advisers.  It avoids sales representatives in the same company competing for clients as well.  Annuity research company Annuity Insight says that New York Life is a top player in the annuity marketplace and they see them excelling into the future.  The addition of a new position as the head of business development for retirement income security products was given to Tom Johnson, formerly an executive at Mass Mutual.

As the heads of financial services companies press Congress for reforms dealing with retirement savings, they are making changes in their product offerings to account for new government support.  This information comes from Matt Ackermann’s article “Retirement-Product Moves Accompany Reform Drive” in Bond Buyer.  The changes they seek would ensure that consumers’ savings would last them throughout their retirement.  Robert L. Reynolds is the president and CEO of Putnam Investments.  He says that the goal of this reform could be met with more 401k annuities, or using some of one’s 401k savings to purchase an annuity with guaranteed lifetime income.  His goal is to help people better manage their retirement plans after they have been successful in saving over the years and growing their retirement plan.

Changes made over the past three years have already benefited consumers, most notably the Pension Protection Act of 2006 which required employers to offer enrollment in 401k plans to all employees.  Reynolds hopes that 2010 will be a year for retirement reform, especially for annuities.  “Annuities need to become more transparent, less complicated and less costly to become part of the long-term solution.”  With a little help from the government, and positive changes from financial companies, Reynolds believes that annuity assets will be $5.5 trillion in 2020, increasing from $1.7 trillion this year.  Whether consumers purchase fixed annuities or other annuity products, financial services companies assert that annuities and similar products are the best way to ensure consumers’ money lasts throughout retirement.

In the Retirement Income Journal’s article “Estimating Out-of-Pocket Health Care Costs in Retirement” by Kerry Pechter, a somewhat startling figure is highlighted.  In retirement, couples should expect to spend over $200,000 on their co-pays, deductibles, and premiums.  The reason it is so difficult to plan for health-care expenses in your retirement is the unpredictability of it all.  The 10% of the US population that spends the most money on health care accounts for 63% of yearly health care spending.  But no one knows if and when they will be part of that 10%.  While planning for you retirement with fixed annuities and other financial vehicles, account for the estimated $10,000 that couples will most likely spend yearly on health care.

So how can a couple prepare to pay the estimated $200,000-$300,000 to cover Medicare deductibles and co-pays and any premiums for private insurance?  As health care costs are expected to rise, the following tips will become even more important.  Save more for your retirement budget to accommodate health care costs.  Wait to retire until you receive Medicare coverage at 65 or purchase private insurance to cover the gap between retirement and Medicare.  It is wise even when you receive Medicare to supplement its coverage with some private insurance and to purchase long term care insurance for covering nursing home or assisted living stays.  You have the most control over the last two pieces of advice.  Be a smart consumer of health care and economize your health care spending along with ensuring that you live a healthy lifestyle to combat health care needs.

Prudential Financial Inc. has posted a profit for the second quarter in a row, according to “Prudential Posts Jump in 3Q Net: CEO Says It Will Weather the Financial Storm,” by Al Slavin of Best Week. After a large loss posted in the third quarter of 2008, Prudential is pleased to report net income of $1.1 billion in this year’s third quarter.  Individual annuity net sales went from $481 million in the third quarter of 2008 to $4.4 billion in the third quarter of 2009.  That is close to an increase ten times last year’s net sales.

The Chairman and Chief Executive of Prudential attributes their sales success to the belief that they will make it through the financial difficulties facing the country.  They hope to maintain their success and rise above competitors that are still struggling to find footing.  Prudential has a confident mindset and is proud of maintaining quality products and services throughout the economic crisis.  Prudential maintains competitive products and fixed annuity rates.  Speak to an expert about purchasing an annuity from a strong financial company.

The financial planning program MoneyGuidePro Version 2.2 was released last week, according to Investment News‘ “MoneyGuidePro Version 2.2 now available” by Davis Janowski.  There are many features new to this updated program that can be used by financial advisers who are creating plans for clients and prospective clients.  The program has an internal Roth IRA conversion feature and a Roth IRA conversion calculator that is separate.  PIE Technologies is the company that offers the program.  Their chief executive said that they thought advisers needed the Roth IRA abilities at both of those levels.  The Roth IRA calculators are even more important now that individuals with higher income will finally be allowed to convert their traditional IRA’s or 401k’s to Roth IRA’s.

Another important feature of the new MoneyGuidePro deals with variable annuities.  Advisers can include variable annuities with guaranteed-minimum-withdrawal-benefits for clients that have purchased these.  They have also been included in the Goal Strategy area so that plans with and without variable annuities can be compared.  PlayZone is perhaps the most popular new feature because it allows both clients and advisers to “play around” with the numbers in their plan and see what the different outcomes could be.  Although MoneyGuidePro costs $1,295 annually, most advisers can receive discounted offers through specific broker-dealers.