Fixed Annuity Sales Continue to Soar While Massive Inflation Risks are Ignored
Bloomberg reports that there is continued strength in fixed and immediate...
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Immediate Annuity
An annuity with payouts that commence shortly (within months) after the annuity has been purchased. Immediate annuities are purchased with a single (lump sum) premium payment. Immediate annuity payments can be either fixed or variable. The payout period can be a certain amount of time such as 10 years, or can be guaranteed for the duration of the annuitant’s life (a life annuity). With an immediate annuity: 1) money goes in immediately as a single premium payment; 2) the money can be invested at a guaranteed rate or a variable rate, and; 3) payments from the annuity start right away.
"Lock in a Lifetime of Income" with Immediate Annuities
The financial crisis has resulted in renewed interest in immediate annuities which can be used to lock-in stable, guaranteed income for a lifetime. "An immediate annuity can function just like a pension , producing a predictable payout. As the "immediate' part of the name suggests, the distributions start shortly after the money is invested." Longevity risk , inflation protection, how much to annuitize , and adding annuities over time are addressed in this article. Source: Wall Street Journal...
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Consider Alternatives Such as Immediate Annuities to “Stop Risking Life Savings”
Article encourages partial annuitization through fixed annuities as a prudent approach to planning one's retirement finances. Even if you invest well and diversify your portfolio, you can't be completely sure that you'll outlive your money. That's where putting a portion of your assets into an immediate annuity can be useful -- by guaranteeing a stream of income for life, supplementing what you'll get from Social Security and any employer pension you might receive. Source: Motley Fool Full Story
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What are the differences between variable, fixed and immediate annuities?
There are many, many different types of annuities.
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Harvard Professor Roland Fryer – The Annuity Puzzle and Why People are More Comfortable Flying if They Can See the Cockpit
The annuity puzzle refers to the fact that few people choose to annuitize even a portion of their...
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