An annuity comes in many forms, but a simple definition is that an annuity is a contract that converts a sum of money into a series of periodic payments for an agreed upon period of time. An annuity can be thought of as a financial vehicle that converts a pool of money into a stream of income. Annuities are most useful in addressing the financial planning needs of people in or approaching retirement. Annuities are unique in the financial world because they can provide protection against the risk or outliving one’s assets (longevity risk) by guaranteeing income payments in perpetuity or any other selected amount of time. Annuities can be viewed as a type of personal pension plan. Social Security is similar to an annuity in that money contributed over the course of one’s working years is converted into a series of periodic payments that provide income during retirement.

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The Hartford Seeks to Avoid Repeat of 2008

The 2008 financial crisis hit the Hartford Financial Services Group harder than many of its peers. At a recent investor meeting, executives from The Hartford discussed how the company has positioned itself to avoid a repeat of 2008—largely through de-risking of its balance sheet. The following is a high-level representation of changes in the composition of assets in The Hartford’s investment portfolio: Reduced holdings of commercial mortgage-backed securities Reduced subordinated...

John Hancock Unveils an Inflation Protected Annuity

John Hancock Annuities announced the release of a new fixed annuity product that provides owners with inflation protection. The “Inflation Guard” product offers principal protection through a fixed interest rate that is guaranteed through the first year of the contract. After the first year, the interest rate is floating. This floating rate is based on a rate of inflation that is derived from the year-over-year change in the Consumer Price Index-Urban or “CPI-U.” A...

Understanding Swiss Annuities

While it might be an unusual time to provide an explanation of Swiss annuities given what has been taking place of late with the Swiss franc and related decisions made by the Swiss National Bank, it still makes sense for any financial services consumer to understand potential benefits of these products.

Switzerland - Courtesy of Travellingtamas