Annuity FYI Blog

The Times Union published a press release from Penn Mutual about their new line of variable annuities.  “Penn Mutual’s New Smart Foundation Variable Annuities Aim to Grow and Protect Retirement Funds from the Threat of Longevity and Market Volatility.”  The Smart Foundation Variable Annuities offer three different products from which to choose as well as multiple benefits that can be added as optional riders.  Penn Mutual has been around for 165 years and has a long commitment to annuities and the financial strength to back them up.  They believe these new variable annuities will help alleviate stress in retirement by protecting their clients’ savings against longevity risk and market fluctuations.

The basic features, fees, deposit minimums, and surrender schedules are the same with all three variable annuities.  However, the Smart Foundation Variable Annuity is the most basic.  It is good for clients who are beginning their retirement funding and don’t need immediate access to the money.  The Smart Foundation Flex Variable Annuity is meant for those who are retiring soon and will need their money right away.  If you are looking to rollover a large account, such as a 401k, into your annuity or consolidate more than one account, the Smart Foundation Plus Variable Annuity may be right for you.  All of the deposits in this third option get a purchase payment enhancement, giving you a greater opportunity for accumulation.

Based on your own need for income, tolerance of risk, and other needs, you can add optional riders to any of the new variable annuities.  There is a Guaranteed Growth and Income Benefit to ensure your account grows in value.  You can also opt for a Guaranteed Minimum Accumulation Benefit to protect your deposit against a volatile market.  If you’d like your heirs to receive a death benefit annuity, you can add the optional Enhanced Death Benefit.  Clients can customize their own portfolio or use one of Penn Mutual’s Lifestyle Asset Allocation funds.  There are some great new variable annuity choices out there from Penn Mutual.

Written by Rachel Summit

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If you have a 401k or IRA that you are looking to turn into a lifetime stream of retirement income, an inflation-adjusted immediate annuity can help you do that.  Steve Vernon gives you tips to on purchasing an immediate annuity by using part of your 401k or IRA in the CBS MoneyWatch article, “IRA and 401(k) drawdown: Just tell me what to do for immediate annuities.”  Vernon says to use part of your 401k or IRA to purchase the immediate annuity and use the rest for managed payouts.  He recommends using an online annuity service to shop around for the best immediate annuity rates, but you could also have your financial advisor help you purchase an inflation-adjusted immediate annuity.

Many workplaces have online annuity services that you can use to transfer your 401k, so check with your employer.  If you’d rather not opt for the inflation-adjusted annuity, you can purchase a fixed annuity that will increase 3% on a yearly basis to cover increases in costs.  The author recommends that every married person opt for a joint and survivorship annuity that will pay their spouse at least 2/3 of the monthly payments when they die.  You can even choose to continue 100% of the payments; just keep in mind that the higher percentage you choose, the lower your monthly annuity payments.  Using a 401k or IRA to purchase your annuity offers tax savings, so make sure to mention that is where the money is coming from.  As with all annuities, they are “final sales” so use the portion you know will help you with a secure retirement without using all of your savings.

Written by Rachel Summit

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We’ve talked a lot in this blog about the recent federal government interest in annuity products and their use in retirement.  Christi Roberts’ Annuity News Journal article, “Annuity rules proposed by treasury,” details some of the proposed changes and their purpose for Americans.  Companies holding 401k’s or pensions have been concerned about offering annuities because they believe the fees are high and they may choose the “wrong” insurance company.  The government is looking for ways to make it easier for an individual to do their own transfer of 401k money into an annuity.

There has also been a lot of talk recently about longevity annuities.  These annuity products pay out money starting at age 80 or 85.  Another option discussed by the federal government is allocating a percentage of your money, say 80%, to be paid immediately and saving the remaining percentage to be paid out at some point in the future.  All three solutions offer great benefits to retirees and to investors.

The federal government is focusing a lot on annuities because of the guaranteed income you will be paid out over your lifetime.  If your investments run out of money while you are still living, you’ll have your annuity income to rely upon to carry you through the rest of your life.  Your payments are guaranteed as long as you choose a solid insurance company that is still around.  As Americans live healthier and longer lives, the government wants to make it easier to use some of your money to purchase an annuity for its guaranteed lifetime income.

Written by Rachel Summit

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The American Council of Life Insurers issued a press release through Insurance News Net regarding the government’s plan to make annuities more accessible for retirees.  The ACLI approves of H.R. 4050, The Retirement Plan Simplification and Enhancement Act of 2012, and Massachusetts Rep. Richard Neal for introducing the act.  This bill is meant to get employers to offer more annuities in their retirement plans so that Americans will have guaranteed lifetime income from their savings.

The Treasury Department made it easier earlier in February for employees to purchase a deferred 401k annuity with some of their employer-sponsored retirement plan.  They promote a deeply deferred annuity, which is one that will be deferred until 10 to 20 years after the start of retirement.  The Retirement Plan Simplification and Enhancement Act makes it easier for insurers to offer lifetime income options with employers through the Employee Retirement Income Security Act.

401k plans are a great way for employees to build retirement savings, but without annuities they don’t always offer the best options for receiving your income.  Annuities are the only way to ensure guaranteed lifetime retirement income payments from your 401k plan.  The ACLI is a strong supporter of the government’s plans to make it easier for employers to offer annuities in 401k plans.

Written by Rachel Summit

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Everyone likes to get something for free right?  How about invaluable information that will help you retire without the worry of outliving your savings?  Annuity FYI has just published a new Investor’s Guide to Lifetime Income Benefits in addition to their guides for secondary market annuities and fixed indexed annuities.  Best of all, this Investor’s Guide is completely free.  Email Annuity FYI and you will receive your free guide to help you navigate through lifetime income benefits and find the one that is best for your individual situation.  The guide will also help you determine the cost to add one of these benefits to your annuity and ensure that you understand just how these benefits work.

We all know that life expectancies are going up while savings are going down in many cases.  Eighty percent of Americans will have to delay retirement or live on less than they had planned because they haven’t saved enough.  Purchasing annuities with lifetime income benefits can help many Americans ensure that they don’t run out of money in retirement.  By using a portion of your retirement savings towards a 401k annuity or an immediate annuity with lifetime income benefits, you safeguard your future with lifetime monthly income payments.

Annuity FYI’s Director of Marketing says that the company focuses on keeping up with their customers’ demands as those demands change.  Security in retirement is of high importance right now and this free Investor’s Guide to Lifetime Income Benefits not only gives an overview of the annuity benefits, but also gives real world scenarios showing how you can apply them in your life.  The Investor’s Guide uses reputable sources like The Center for Retirement Research at Boston College, AARP and the Employee Benefit Research Institute.  Email or call Annuity FYI to get your free Investor’s Guide to Lifetime Income Benefits today.

Written by Rachel Summit

Follow Finance Mama on Twitter http://twitter.com/#!/financemama