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Comparison Shopping for Annuities

A good question and answer piece from the Chicago Tribune. The reader had just purchased a $400,000 immediate annuity at a relatively young age. The purchase was also made from one insurer in a relatively low interest rate environment. Having both a pension and Social Security (both are lifetime annuities), I would not have committed half my portfolio to an income annuity at the relatively young age of 63 and during a period of low interest rates . It does not appear that the annuity came with...
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Annuity
Immediate Annuity
Inflation
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Pension
Social Security
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Income
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Income Annuity
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Annuity
Immediate Annuity
Inflation
Insurer
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Social Security
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Income
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Income Annuity

Income Limits for Roth IRA Conversions to be Eliminated

Income limits that have prevented many people from converting from a traditional IRA to a Roth IRA will be eliminated on January 1, 2010. With a traditional IRA, contributions and growth of capital are tax free, but distributions are taxed as normal income. Roth IRAs differ in that contributions are taxable while growth of capital and distributions are tax free. In addition, unlike traditional IRAs, there are no required minimum distributions with Roth IRAs. Last, with a Roth IRA your heirs do...
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Retirement
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Many Employers Modifying or Eliminating 401k Matching

A recent study from accounting and tax advisory firm Grant Thornton indicates that many employers are pulling back on 401k plans in light of the difficult economic climate. Grant Thornton surveyed 283 companies. Findings include: 29 percent have modified or intend to modify their 401k employer matching contribution. 20 percent of all respondents plan to eliminate the employer match entirely. Larger employers are more inclined to make changes to their 401k plans. Companies in the health care and...
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Manulife Under Pressure - Hurt by Lack of Hedging in Variable Annuity Business

Canadian insurer Manulife Financial is under investigation by the Ontario Securities Commission for failing to disclose certain obligations related to its variable annuity products. Manulife's stock price has been under pressure and the company had to draw down a $3 billon loan. Manulife, the parent of John Hancock , has reported billion dollar earnings losses in its two most recent quarters. The company is suffering from the decision not to hedge effectively within its variable annuity...
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John Hancock
Manulife
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Earnings
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Variable Annuity
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Earnings
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John Hancock
Manulife

Dramatic Changes in Retirement Landscape

The picture for near and current retirees has changed 180 degrees in the past couple of years. Questions such as where to retire and what do do during retirement are replaced with whether to retire and how to make sure one does not run out of money during retirement. Working longer, waiting to draw on Social Security , and understanding longevity risk are front and center for the vast majority of retirees. Decumulation or drawing sustainable income from accumulated financial assets is one of...
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Accumulation Phase
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Longevity
Social Security
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Accumulation Phase
Decumulation Phase
Decumulation
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Social Security
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Retirement
Retirement Portfolio

Employers Cautious About Annuities in 401k Plans

Employers who offer 401k plans seem intrigued by the notion of providing an annuity option to employees who participate in the plans. Recent stock market volatility makes the prospect of stable, guaranteed income very attractive in theory: Given the stock market’s volatility, Silgan is one of a number of 401(k) plan sponsors seriously discussing adding an annuity option to their 401(k) plans. With most employees’ 401(k) accounts decimated, the idea of providing guaranteed post-...
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Annuity
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Fiduciary
401k
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Annuity
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Investors Making Terrible Trading Decisions with ETFs

A recent study from John Bogle indicates that retail investors are making miserable buy and sell decisions with exchanged traded funds (ETF). The study looks at the difference between between an ETF's return and the returns of the average dollar invested in those funds. In other words, the study looks at the difference between the fund's return over a particular time frame and the return to the average investor in the fund who made buy and sell decisions over that same period. The study...
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Frame
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John Bogle
Mutual Funds
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John Bogle
Mutual Funds

Underactive Thyroid and Low Metabolism Linked to Longevity

A recent study of a population with high levels of longevity indicates that a common feature of the group is a slightly underactive thyroid. An underactive thyroid is a condition that, until recently, seemingly required medical attention. The study seems to indicate otherwise: Researchers tested the levels of thyroid stimulating hormone (TSH) in 236 Ashkenazi Jews, who were about 100 years old, and their children, most of whom were in their 70s. For comparison with people not related by blood,...
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Longevity
Centenarian
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Health
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Longevity
Centenarian
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Health

Retirement Planning Roadmap - Key Events

An outstanding layout of a retirement planning timeline from Emily Brandon at U.S. News and World Report. Key dates and ages are discussed for all manner of retirement planning milestones: 401k contributions and distributions. IRA contributions and distributions. Roth IRA contributions and distributions. Medicare. Social Security . Required minimum distributions. Source: U.S. News and World Report Full Story
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Retirement Planning
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Required Minimum Distribution
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Retirement
Medicare
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Retirement Planning
Social Security
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Required Minimum Distribution
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Retirement
Medicare

Waiting to Annuitize Makes Sense in Current Interest Rate Environment

In general and all other things being equal, it is better to hold-off on annuitizing an existing annuity contract if possible in the current environment. First and foremost we are in a low interest rate environment, so current annuitization locks-in those low rates. Second, there is the possibility of missing out on future growth of the contract value. Yet another good annuity-related article from the Chicago Tribune. Source: Chicago Tribune Full Story
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Annuity
Annuitization
Annuitize
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Annuity
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Annuitize

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