Annuity FYI Blog

The Financial Industry Regulatory Authority (FINRA) will ask the SEC for permission to expand their BrokerCheck system, according to FINRA’s news release “FINRA Proposes Further Expansion of Broker Information Publicly Available Through BrokerCheck.”  The BrokerCheck system allows the public to view records of securities brokers both current and former for free.  The proposed changes would increase the amount of complaints that are publicly available.  It would also make the records of brokers that left the industry available for ten years, up from the two years currently available.  Information regarding any criminal convictions and certain lawsuits would actually be permanently available.

Wise consumers compare annuities before making their investments.  Now it can be easier to compare the brokers who sell annuities to consumers.  Unfortunately, shady brokers who have been forced to leave the industry have shown up in other facets of finance looking to do harm.  They have been involved in fraud and other forms of misconduct related to finance.  FINRA wants to get rid of these former brokers for good, but as wise consumers we need to use FINRA’s free online BrokerCheck service for it to be effective.  Before you purchase annuities or make other financial investments, check your broker out online and make sure that they have a moral financial record.

Wells Fargo’s new SGI Wise US Index Equity Linked CD is Annuity FYI’s top pick for this investment vehicle.  The equity linked CD is a great investment choice, especially with people who have a six year investment window.  Equity linked CD’s have the added benefit of being FDIC insured which is a comfort to many investors.  They are also linked to the market so that you can reap the rewards of a market upswing.

There are many reasons that Annuity FYI recommends the Wells Fargo wise indexed cd.  Not only is your principal guaranteed by Wells Fargo, it is also insured by the FDIC up to their maximum amount allowed.  With no cap or spread, this equity linked CD boasts 90-110% participation.  The index is easy to understand and transparent to investors.  While the SGI Wise US long-short index is new, it has been tested back to 1992 to determine the returns investors would have received.  With this information, it was determined that the SGI Wise Index performed above the S&P 500 over many timeframes.  Investors have the potential to do much better than the current low interest rates have been offering.

There a few things to consider when you compare equity linked CDs.  You do not want to purchase the product if you will need your money before the six year holding period is up.  While the 1% penalty isn’t that significant, it is best not to make withdrawals until the CD matures.  Any gains you receive will be paid at the end of the six years and there are no dividends.  With those considerations, if you think an equity linked CD may be right for you, contact one of our experts.

An equity linked CD is a certain type of a certificate of deposit in which the rate of return is linked to a stock index such as the S&P 500.  Equity linked CD’s are issued by banks and insured by the FDIC, offering the confidence that your investment is always secure.  When you compare equity linked CDs with annuities, you’ll find that the products offer a lot of the same benefits.  Principal protection is one of the main benefits offered by both retirement products.  They also offer low cost compared to other retirement vehicles and the chance to participate market upswings.  While the equity linked CD and the annuity are different retirement options, they offer similar benefits and may be useful in combination when determining your retirement portfolio.

Annuity FYI recommends Wells Fargo’s equity linked CD.  The product, Wells Fargo SGI WISE US Index, has the best benefits that Annuity FYI has seen in this type of product.  The CD term is 6 years with a participation rate averaging 90%-100%.  There are no spreads, caps, or fees and the minimum investment is only $1,000.  The FDIC guarantees 100% of the principal amount invested.  While there may be other equity linked CD products recommended by Annuity FYI in the future, at this time the Wells Fargo SGI WISE US Index is the only one believed to be best for retirement portfolios.

Penn Mutual has good news for their clients and potential clients according to company press release “The Penn Mutual Life Insurance Company Enhances Living Benefit Rider for Annuity Product.”  They have improved their Growth and Income Advantage Benefit (GIAB).  The GIAB is a living benefit rider that is offered with Penn Mutual’s variable annuities.  The changes help clients increase their accumulation potential and manage their risk better at the same time that they help secure retirement savings during changing economic conditions.  The GIAB guarantees income growth and offers two different options for withdrawals.

The following changes highlight why Penn Mutual believes it has one of the best annuities available to its clients.  The guaranteed accumulation rate has increased to 6% from 4% for the withdrawal benefit base.  Also, the guaranteed withdrawal percentage has gone up to 5% from 4% for the lifetime income option.  Perhaps most exciting for Penn Mutual’s clients is that they will not be paying more for these enhancements to the Growth and Income Advantage Benefit rider.  They will still maintain all of the other benefits offered with their annuity, they’ll get these enhanced benefits, and they will pay the same fees.

Symetra Financial’s press release “Five Steps to Retiring On Time” lists annuities as an important tool for retirement success.  A recent survey conducted by Symetra and two partners showed that nearly half of pre-retirees (45 and older) have not determined how much income they will need to take them through the rest of their lives.  Well over half of the pre-retirees didn’t think that they would be able to retire at their ideal retirement age.  With this information, Symetra has issued five steps that they believe can lead you to a comfortable retirement.

First you should “create a plan.”  Determine how much money you will need in retirement, including medical care, inflation, traveling, and other expenses.  Many estimates show that people need about 80% of their pre-retirement income in retirement.  The next step is to “manage and reduce your expenses now, before retirement.”  Cut costs where you can and pay off your credit card debt before you lose your working income.  The third step is to “diversify your investment portfolio.”  While it still will not guarantee a profit or promise no losses, spreading your investments over different products and investment styles is the best way to protect against the market.

Next you should “continually evaluate your investments.”  Changes in your life, health, job, and other areas make it important to reevaluate your goals and risk levels.  The final step is to “consider creating a guaranteed income stream during retirement.”  Annuities are one of the best products to ensure that you do not outlive your savings.  Always check fixed annuity rates and variable rates because you can find great products out there to help you in retirement.  By using a portion of your savings to purchase an annuity, you guarantee a monthly income stream coming in for life.