Annuities Archives - Page 15 of 16 - Jerry Golden on Retirement

When the government gives retirement advice, should you listen?

February 9, 2016 By Jerry Golden in Annuity Tags: Annuities, Guaranteed Income, retirement income

It is admittedly no simple task to plan one’s retirement with confidence. Even the federal government isn’t entirely clear on its recommendations to individuals who are working to prepare for a financially secure future.

White House Conference on Aging endorses income annuities — Government retirement advice

On one hand, the Internal Revenue Service last year created rules that allow us to invest part of an IRA or 401(k) in a Qualifying Longevity Annuity Contract, or QLAC. This financial product can guarantee a substantial lifetime income late in retirement in return for a lump-sum investment before or early in retirement. It is a special form of a deferred income annuity.

On the other hand, the White House Conference on Aging, which issued its final report last month, also endorsed income annuities, saying: More

What’s Your Number? Six Reasons Retirement Calculators May Fail Individual Investors

January 26, 2016 By Jerry Golden in Annuity 4 Comments Tags: Annuities, Guaranteed Income, retirement income, Social Security

A pop-up appeared on my computer screen offering to calculate my “retirement number.” The message said it could tell me the amount of savings I’ll need to retire comfortably. I’ve seen these enticements before, usually offered by a well-known and highly regarded financial institution. Even the robo-advisors and their calculators are carbon copies of the industry’s accepted approach.

Unfortunately, these calculators are not the best way to plan your financial future.

I don’t question the so-called Monte Carlo investment algorithms used to simulate market returns. What I do fault is the entire premise of extending that simulated market performance to individual investors’
personal retirement plans. An individual investor is not a pension or endowment fund with other sources to draw on, or with a virtually perpetual existence. More

White House Conference on Aging Recognizes Value of Income Annuities for Retirement Security

January 19, 2016 By Jerry Golden in Interesting Articles 2 Comments Tags: Annuities, Guaranteed Income, IRA, personal savings

The White House Conference on Aging that concluded this month was remarkable for its acknowledgement that too few Americans are assured of a secure late-in-life retirement. The conference did not, however, fully spell out how to solve the problems it raised.

The conference’s final report also concluded that the three-legged stool of Social Security, personal savings and employer savings arrangements is a little wobbly, putting millions of retirees in danger of running out of money in old age. In addition, as retirees age they often see their incomes fall and face unplanned medical and long-term care costs–thus magnifying the problem.

The Conference on Aging listed the favorable qualities of annuities, mentioning that income annuities “reduce the risks that retirees will outlive their savings or that their living standards will be eroded by investment losses or inflation.” More

Consider These Facts When Your Advisor Dismisses a QLAC

January 13, 2016 By Jerry Golden in Annuity 3 Comments Tags: Annuities, Guaranteed Income, retirement income

As the relatively new resource for retirement income — called the “Qualifying Longevity Annuity Contract,” or “QLAC” — becomes more well-known, financial advisors are trying to determine whether to recommend QLACs to their clients. The result so far has been confusion about what a QLAC is designed to do and how it can be used to enhance a retiree’s confidence in late-retirement finances.

The point of a QLAC is simple. It provides an additional source of guaranteed lifetime income to retirees’ portfolios that enhances their ability to invest for growth while providing peace of mind from gaining a source of income that will last as long as they live. More

A Lack Of Definition Leads To A Lack Of Understanding

January 17, 2014 By Jerry Golden in Annuity Tags: Annuities, Deferred variable annuity, Fixed payout annuity, Indexed annuity, retirement

In keeping up with the daily articles and posts about retirement, I have noticed discrepancies in the use of the term “annuity”, which has developed into a point of contention. This inconsistency in a clear definition of annuities has plagued these articles, which in turn hurts the reader, the writer and the annuity business.

A recent example of this growing problem arose a few days ago while I was comparing two retirement advice articles from two different sources. In Lisa Hay’s recent article from Market Watch, titled 6 Money Mistakes To Avoid In Retirement, her second warning is “not to fall for an annuity sales pitch”; while in Steve Vernon’s article titled, How Long Will Your Retire Savings Last, from CBS Money Watch, he states, “one way to avoid running out of money before you die is to buy an annuity from an insurance company.”

Do these two writers disagree about the efficacy of a single type of annuity, as the lay reader would assume? No, in fact they’re referring to two totally different forms of annuity.