Annuity FYI Blog

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

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For employees who have a cash balance retirement plan at work, they have the choice of taking a lump sum payout at retirement or taking annuity payments over time.  According to Steve Vernon’s CBS News article, “Cash balance retirement plans: Annuity options,” many large companies offer this type of hybrid 401k and pension plan.  Cash balance plans are like 401k plans because you put money into an accumulating account where you take the entire amount with you when you leave the company or retire.  They are like pensions in that employers take on all of the risk associated with the investments and you have the option for a lump sum payout or annuity payments at retirement.

If you take a lump sum payout, you can transfer your money to immediate annuities with a life insurance company or roll it into another type of investment.  With the annuity option through your cash balance retirement plan, you would likely receive higher monthly payments that any option you could find outside of the plan.  Also, women receive the same monthly payment as men in the cash balance annuity, unlike with traditional annuities.  Employer-sponsored plans cannot discriminate for sex, even though women tend to live longer than men and receive lower annuity payments from insurance companies.  If you are lucky enough to have a cash balance retirement plan from your employer, it is likely that the annuity option is your best choice to cover your retirement expenses.

Written by Rachel Summit

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While you get a larger annuity payout when interest rates are higher, they are still a good investment choice even in this low annuity rate environment.  In “An annuity can still make sense,” Andrea Coombes of The Wall Street Journal says that this is still a good time for annuity purchases.  An immediate annuity helps to protect you against two major retirement concerns.  The first is that a drop in the stock market will cause you to lose all of your savings and the second is that you will run out of money during your lifetime.

If you haven’t saved enough money to carry you through retirement, an annuity is not going fix that problem.  But an annuity will ensure that the money you have saved, especially that money in your 401k, will last over your lifetime.  The monthly payments you receive will depend on the amount you use to purchase the annuity and many other factors, but it’s like a budget so that you know how much you will have to spend on expenses each month.  Some people choose to add an annuity rider to adjust for inflation or continue death benefits to their heirs in case they die sooner than anticipated.

Variable annuities with guaranteed income might be a better choice for people who want to maintain some control over their money.  With a variable annuity, you get to choose the sub-accounts in which you invest your money through the insurance company.  Make sure to find a lower fee variable annuity because there are some products that charge high fees.  State guaranty associations cover annuities in the case that an insurance company is unable to fulfill their obligations, so make sure that your state covers the entire amount of your annuity purchase.

Written by Rachel Summit

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The Annuity News Journal article by Henry Steelman, “Is it wise to delay my annuity,” examines the benefits to deferred versus immediate annuities.  When purchasing an annuity, you have the option to start receiving payments immediately with an immediate annuity or to defer your payments until some predetermined point in the future.  If you choose an immediate annuity, you will start receiving monthly payments soon after your annuity purchase.  This is the best type of annuity for someone who has just retired and needs to maintain their monthly income to meet basic living expenses.  If you have won or inherited money and don’t need it right away, it’s probably a good idea to purchase a deferred annuity.

A deferred annuity has some advantages based on your particular risk tolerance and financial needs.  If you purchase an annuity and don’t need the monthly income right away, deferring your annuity can allow you to grow your account with interest until you need to start taking payouts.  That money grows tax-deferred which is another benefit of waiting to take your money.  It’s important to look closely at the annuity rates to make sure that your interest will be greater than the rate of inflation.  Inflation makes everything cost more, so you want to grow your money more that the added costs of inflation.  Your individual situation will be the deciding factor as to whether you choose a deferred or immediate annuity.

Written by Rachel Summit

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The retirement income business and the broker-dealer unit have been combined by New York Life Insurance Co.  They just reorganized their company into two separate businesses.  Their insurance group will remain a separate entity from the other business of retirement income.  New York Life Investments, the broker-dealer unit, will join with New York Life’s retirement income business and be headed by Executive VP John Y. Kim.  Currently, the retirement income business includes both immediate and deferred fixed annuities as well as variable annuities.

Kim has been in charge of New York Life Investments since 2008.  He will now be in charge of New York Life’s retail annuities and mutual funds, as well as their retirement plan services and institutional asset management.  Executive VP Chris Blunt will be running the separate insurance business; he previously was in charge of the retirement income business that has been combined with New York Life Investments.  His job responsibilities in addition to running the insurance business will include the company’s long term care insurance and the business operations of marketing, finance, technology, and service.  The Mexico operations are also now part of this new group.

New York Life’s market share has increased to double digits since they started their reorganization in 2008.  They have also seen significant growth in their investment business and retirement products like annuities.  This realignment will help them keep their focus on agency led distribution.  Their 12,000 agents will still be overseen by Executive VP Mark Pfaff.  The company believes this realignment will help them keep their top spot in the life insurance industry and annuity industry, as well as increase their other retirement business.  A.M. Best rates New York Life Superior with an A++ score.

Written by Rachel Summit

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