annuities | Common News Update

Mar22020 by adminNo Comments

This new rule could change how annuities are sold

Finance

There could be a tug of war brewing over which standard financial professionals should follow when they provide advice or sell products such as annuities to individual investors.The Securities and Exchange Commission is unveiling a new regulation, called Regulation Best Interest, which requires broker-dealers and professionals associated with them to keep their clients' best interests in mind when recommending investment strategies or transactions.However, some critics do not think the new regulation, dubbed Reg BI, goes far enough. The rule falls short of the stricter fiduciary standard, which would require those firms and professionals to put investors' interests ahead of their own.Now, some states are taking sides.Earlier this month, Massachusetts finalized its own fiduciary standard, a...

May182019 by adminNo Comments

Advisors need to know the pros and cons of annuities

Finance

Jose Luis Pelaez Inc | Getty ImagesThe days of an advisor selling an annuity to a client, nabbing a fat commission and never seeing him again are over.Or at least they should be, if you're doing it right.Annuities — fixed, variable or indexed — have been long a part of advisors' toolkits, offering clients the opportunity to obtain tax-deferred growth and income in retirement for a cost.Investors can also opt for extra features in the form of living benefits, which may provide them with additional income in the future.While those attributes might be enough to get pre-retirees curious about an annuity, advisors say that working these products into a client's portfolio is a long-term process. "I would say 2003 to 2009 was the golden age on getting 6% withdrawals on these things for the rest o...

May252018 by adminNo Comments

Why do annuities have such a bad reputation?

Finance

Running out of money in retirement is such a major concern that many workers fear it more than death itself. And while aggressively funding an IRA or 401(k) during your working years will help lower your risk of depleting your savings in your lifetime, it won't guarantee that you don't wind up strapped for cash when you're older. An annuity, on the other hand, can help eliminate that risk. An annuity is a contract between you and an insurance company. With an annuity, you're essentially paying a lump sum of money in exchange for guaranteed payouts for life. Those payments might start right away or begin at some point in the future. Sounds like a pretty good deal, right? Not necessarily. While annuities are a smart investment in theory, there's a reason they tend to get a bad rap. F...

May182018 by adminNo Comments

How to build your own pension with annuities

Finance

In the past, workers often could rely on having two sources of retirement income: Social Security and the pension their employer paid them. Having two reliable monthly checks coming in made it possible to have a financially secure retirement without necessarily having a lot of outside savings. Now, though, most companies don't offer pensions, and it's critical to save money for retirement in order to supplement Social Security payments that, in nearly all cases, are inadequate to cover your living expenses. If you have a retirement nest egg, one thing you can do with a portion of your savings is purchase what's known as an immediate annuity. By doing so, you can essentially build your own pension and get a guaranteed income to supplement Social Security for the rest of your life. Wha...

Jul232017 by adminNo Comments

Who should — and shouldn't — consider making variable annuities part of their retirement portfolio

Finance

When it comes to variable annuities, many financial pros offer a few words of advice: Use with caution.Indeed, as complex investments that are tricky to understand, variable annuities come with risks that sometimes can outweigh the expected rewards."The plain-vanilla ones aren't necessarily a bad deal if they're used the right way," said certified financial planner Colby Winslow, a senior wealth planner with WaterOak Advisors. "But sometimes the fees are so prohibitive that they don't justify using one."Nevertheless, advisors say that in some cases a variable annuity ends up being the best option for a portion of an investors' retirement money.In simple terms, these annuities are a type of investment that offers some income-stream guarantees in retirement. You give an insurance company you...