Financial Planning

What is the present value of a $2,521 Social Security benefit to a woman who starts receiving the benefit at age 66 and has those payments last until she passes away at age 90? The answer is $412,896. This figure likely surprises many people. The reality, though, is that $412,896 is the amount you would need to purchase an annuity --if, that is, an annuity like this actually existed--that offers the $2,521 payment. It is also important for people to understand that the $412,896 should be...

Financial planning and estate planning have been brutally difficult over the past decade. High levels of market volatility , the possibility of deflation , and now threats of inflation have complicated the financial lives of millions of people. Almost anyone in or nearing retirement is faced with incredibly complex decisions. If, for example, you retired in 2000 yet remained fully invested in the S&P 500 you would have watched well over a third of your retirement nest-egg evaporate. Do you...

An annuity ladder basically involves spreading annuity purchases over time. For example, instead of taking $100,000 to purchase an immediate annuity today, a person might purchase five different $20,000 annuities over a seven year period. This approach has a number of advantages: The approach helps avoid the risk of purchasing an annuity at a less then optimal time--for example when interest rates are very low. In this sense, it is somewhat similar to dollar cost averaging when investing . The...