With a large population segment that will undoubtedly live much longer, more options are needed to insure that there is a steady income stream for the lifetime of the retiree.

“In February, the Department of Labor and the Department of the Treasury issued proposed new rules aimed at giving 401(k) plan participants more options to invest in annuities that guarantee a lifetime income stream.”

But, when offered the oportunity to defer up to 25% of their account balances into an annuity that starts paying out further into retirement, such as at age 80 or 85, only about 1% of participants at those companies do so.

Apparently, there are several issues needing resolution before many people choose these longevity annuities.

To read the entire article, check out http://www3.cfo.com/article/2012/5/retirement-plans_401l-guaranteed-retirement-income-proposal-401k-defined-contribution-mercer-bridgehaven-cerico-iric-tejera.

Income or Living Benefit Riders

One of the hottest topics in the annuity industry is the income rider. These are also referred to as living benefit riders. These particular devices can be somewhat complex. Stan the annuity man is going to discuss income riders.

Annuities are an investment people think of when the chips are down, according to research from a business professor at the Richard Ivey School of Business.

“Alessandro Previtero, an expert in behavioural finance and financial decision making, examined annuities versus lump-sum payments, widely considered the two most popular types of retirement plans. Over a six-year period from 2002 to 2008, he surveyed 100,000 retirees with defined-benefit pension plans.

He found that whether retirees chose lump-sum payments or annuities was tied to how well the stock market was performing.”

So it appears that if the markets have been down for the past 12 months, annuities became more of a first choice for retirees.  But, the reverse happens if the markets are up, then lump sum payments were preferred.

“People have a strong tendency to think that what has happened will continue to happen,” he says. “I call it myopic because people only look at very short-term trends.”

Of course, investing in an annuity people receive a guaranteed, regular income for life.  But, even if this sounds simple, there are many things to consider before buying an annuity.

For more relevant information on annuities and other financial topics, such as the article “When Stocks Stumble, Investors Turn To Annuities” at http://www.theglobeandmail.com/.

Structured settlement annuities if used as a vehicle for periodic payments due to an accident, injury etc, are not get rich quick programs nor are they meant to be.

Because of the difficulty in getting out structured settlement money on a whim, such as, I want a new car, a cruise would be nice or whatever emergency you could think up, structured settlement annuities are a way to “get rich slowly”.  Sometimes it is better, than being able to cash in your stocks, mutual funds or any other investment.

“The financial analogy is that having all your money in a savings or checking account is like having food in the refrigerator. Putting money in a mutual fund or certificate of deposit, where it takes some effort (and sometimes penalties and tax consequences) to cash it in, is similar to driving to the store two miles away. A structured settlement is like the 25-mile drive for food. You have to do a lot of work to sell it and take a huge financial hit when you do.

It is better just to hang onto the structured settlement and stay disciplined, just like it is better to stay on a diet.

There is something similar to a structured settlement called an immediate annuity. It pays income for a person’s life, just like a defined benefit pension plan. Although people seem to like lifetime income from a retirement plan, a Smart Money article stated what I long suspected: Few people buy them on their own.”

For more information on structured settlement annuities, read Don McNay’s article “Don’t Run Out Of Money Before You Run Out Of Time”.

Allstate rolls out a structured sales product on oil & gas lease bonus payments.

It was announced this week that Allstate would be rolling out a “non-qualified” annuity funding vehicle that would allow for the structuring of oil and gas lease bonus payments.

While seemingly obscure to those who do not have land upon which they lease oil or gas rights to drilling or production companies, this market has substantial potential given the wide number of privately held or closely held businesses, as well as individuals, who might be interested in spreading the bonus payments they get in some years over a several year period.

To read the rest of the article, go to http://thelegalbroadcastnetwork.squarespace.com/the-lbn-blog/2011/8/6/allstate-rolls-out-a-structured-sales-product-on-oil-gas-lea.html

Why Immediate Annuities Deserve A Second Look for Your Retirement Financial Planning

Utilizing immediate annuities in your financial planning for retirement can be quite simple and have significant advantages, especially over objections about deferred annuities.  An immediate annuity is like a do it yourself pension.

When you retire, you give a lump sum of money to an insurance company, and it immediately starts paying you a monthly income for the rest of your life, no matter how long you live or what happens in the economy, either as fixed monthly income or one that indexes your monthly income for inflation or increases it at a set rate.

While shopping around for an immediate annuity compare monthly income amounts.  And don’t forget to check out the insurance companies’ safety ratings.

There’s no FDIC insurance for annuity products, but most states have insurance guaranty funds that will protect your annuity, up to specified limits.  Be sure to check this out as well.

Immediate annuities may fit into your financial plan for retirement if you do a thorough job researching them before you purchase.

Structured Annuity Settlement

Author: Brian Sibet

What is structured settlement?

This is a term generally used in insurance settlement. Insurance settlements are normally one time settlements given to the affected party or the claimant. The structured Annuity settlement (also called a ‘Structured settlement’) can be called as an extension of the benefits over a longer period of time. In other words, the victim gets his or her structured settlement money in a fixed amount periodically instead of getting the money in one lump sum. Such periodical income would normally last till he fully recovers and is able to take up his normal work.

It is said that the concept of structured settlement was first practiced in Canada in 1970. Later several other countries resorted to this procedure. Considering the advantage of this form of payment of compensation to the accident victims, several countries passed laws to legalize the Structured Annuity Settlement. This type of structured settlement is also called as ‘periodic payment judgment’. The Annuity is decided depending on the nature of injury, time normally taken to fully recover, type of immobility of the victim, the status of the victim, etc.

Structured Annuity settlement Vs one time settlement

In one time settlement, the victim has to suit his budget to the compensation received. This is particularly difficult when the victim is immobilized for longer duration of time. The victim will have to manage the medical expenses, domestic expenses, etc. within the compensation received and there is likelihood of the funds depleting. Instead, under the Structured Annuity settlement, the victim gets the compensation for a longer duration. He is assured of some periodical income till he recovers. With this amount, the victim can maintain his family, pay children’s school fees, the expenses towards food, medical expenses, etc. As a result, the victim’s daily life is not affected. Now this type of settlement is becoming more and more popular.

How to claim structured Annuity settlement?

There are several financial agencies and attorneys who are specialized in such cases. They will guide the claimant about the procedure to be followed in claiming the amount. Of course, they will charge a small amount as their consultation fee.

Article Source: http://www.articlesbase.com/insurance-articles/structured-annuity-settlement-2521343.html

About the Author

Brian Sibet also writes about Retirement Planning and Annuities including Lump Sum Annuity and Sell Structured Insurance Settlement

Variable Annuities, Cash for Retirement?

Variable Annuities, According to the SEC

“A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.

First, variable annuities let you receive periodic payments for the rest of your life (or the life of your spouse or any other person you designate). This feature offers protection against the possibility that, after you retire, you will outlive your assets.

Second, variable annuities have a death benefit. If you die before the insurer has started making payments to you, your beneficiary is guaranteed to receive a specified amount – typically at least the amount of your purchase payments. Your beneficiary will get a benefit from this feature if, at the time of your death, your account value is less than the guaranteed amount.

Third, variable annuities are tax-deferred. That means you pay no taxes on the income and investment gains from your annuity until you withdraw your money. You may also transfer your money from one investment option to another within a variable annuity without paying tax at the time of the transfer. When you take your money out of a variable annuity, however, you will be taxed on the earnings at ordinary income tax rates rather than lower capital gains rates. In general, the benefits of tax deferral will outweigh the costs of a variable annuity only if you hold it as a long-term investment to meet retirement and other long-range goals.”

To become knowledgeable about variable annuities, read this article in full at the US Securities and Exchange site.

Variable Annuity Sales For Advisors

Springtime has arrived and so have the new VAs
InvestmentNews
Last week the insurer said that it would curtail skyrocketing sales of its variable annuities and likely would do so by adjusting its investment options (see related story, Page 1). If that happens, all bets are off, Mr. Cacho-Negrete said. …

This video compares the cost structure of a Variable Annuity and a Fixed Index Annuity.

Many investors thought they held a conservative investment when owning a variable annuity. However, the cost structure alone has given retirement income planners a challenge in providing lifetime income at a reasonable fee.

Are Variable Annuities a Good Idea for Retirement

May 15, 2011

BusinessDay

Today this article is discussing different types of annuities, including variable annuities. Your state of health will determine the appropriate annuity you deserve Like the saying goes “no two head wears the same cap,” there are different types of annuities which serve individual purposes based on the difference in health status and how long such a person can live. For instance, if someone’s heath is threatened …

8 Myths About Variable Annuities | eHow.com A variable annuity is a type of investment contract that insurance companies sell as a way to save for retirement, such as:

• Annuities Go Well in Retirement Accounts
• Variable Annuities Are a Good Place to Save After Maxing Out Retirement Accounts
• Variable Annuity Payments Are Guaranteed
• Variable Annuities Help You Transfer Wealth
• Variable Annuities Are a Cost-Effective Way to Save for Retirement
• Variable Annuities Are Simple to Understand
• You Always Have Access to Your Variable Annuity Money
• Variable Annuities Automatically Provide Inflation Protection

For an explanation about these myths look here….. www.ehow.com/info_8410048_8-myths-variable-annuities.html

Variable annuities are tax-deferred retirement savings products offered by insurance companies — but they often come with high fees.

A Different Look at Life Insurance, Trusts and Annuities

A lot of hasty decisions are made when a family member dies. Many of them are bad. There seems to be an army of vultures waiting to prey on the vulnerable. Life insurance forces people to deal with the idea that death may come and come in an untimely fashion, and most people don’t really like to think about that future.

The author of the article, Don McNay on the Huffington Post, says “My life insurance is owned by a trust. When I die, the trustee will buy annuities for the beneficiaries. The annuities will pay monthly for the rest of the beneficiaries lives and increase at 3% a year.”

This prevents scam artists and outside pressures from losing money that is delivered in a lump sum. He goes on to say “That is why the combination of life insurance, a trust and lifetime annuities works for me.”

5/12/2011
New life insurance companies entering the structured settlement annuity market bring more choices and competition. This is good news for all who benefit from structured settlements as a tool to aid the resolution of lawsuits and attorneys who structure attorney fees.

The first one is Berkshire-Hathaway, they tend to be specialists in long durations and/or deferrals.
Next is USAA, familiar to people associated with the military. Another A++ company, in addition to Berkshire Hathaway.
United of Omaha, part of the Mutural of Omaha Group.
Hartford Life Insurance.

Structured Settlement quotes will be on your mind, once you have decided to sell a structured settlement.

The new video, as of 5/12/2011, discusses your options.

You may think, when offered a structured settlement, that you don’t want this, you just want your money.
But there are benefits to a settlement like this.

Just what is a structured settlement?
Well, it is a customizable stream of payments and can be of different types, such as, annuities or treasury bonds.

It is important to shop around and get information from a professional.

You don’t want to over structure. One of the greatest strengths, is that you are locked into it, but that is also it’s greatest weakness as well.

Getting a structured settlement means that if you get X amount of dollars every month, you can count on that and under present tax laws, it will be tax free.

You can only get structured settlement quotes from licensed insurance agents who are appointed by annuity issuers or by a vendor who sell US Treasury Trusts. Check for licenses.

Public losing confidence in Social Security

Annuities Could Be The Answer

May 11, 2011
By Seth Kravitz
AnnuityNews.com

Social Security may not be there when I retire! That is a feeling that many Americans may empathize with. This insecurity toward Social Security is good news for the annuity industry.

About 35% of Americans are “very” or “somewhat” confident in the future of Social Security. This figure is down from 40% five years previously and from almost half of those responding (46%) in 1985, according to the AARP.

But are annuities the answer? To read further, continue here….

According to BRETT ARENDS in the Wall Street Journal, annuities may be a risky bet right now. Anyone buying an annuity will be locking in at today’s low interest rates, earning a low level of return. And it could leave you at risk if inflation picks up.

There are several issues to consider with buying an annuity at this point in time, such as that you lose control of your principal and you’re dependent on the financial strength of an insurance company. To read the entire article click here…

And to watch Steve Forbes interview with Ken Fisher who Hates Annuities, check out the video below.

Considering annuities? You might as well give the salesperson money to put their kid through school.
Load and no load investors. Multi-nationals from different countries, and more.

Which of those two, deferred fixed annuities or CDs, is for you, is discussed in the article by Michelle Ksidakis who is a financial services professional for New York Life.

Both of them, though categorized as low risk, differ in important ways.  Which would be right for you?  It depends on your goals and priorities according to Michelle.  In these uncertain financial times, it is important to find out the best places to place your money.  To read the entire article, CDs and Deferred Fixed Annuities: Which is Right for You?

According to this article at My San Antonio, after you have fully funded your IRA and your 401(k), if you have funds left, you may want to invest in variable annuities, which offers these benefits:

Tax deferred earnings.
A variety of investment options.
No contribution limits.
Payout flexibility.
Guaranteed death benefit.

Even with those obvious benefits, there are still considerations to discuss with your financial adviser before investing in variable annuities.

Read more: http://www.mysanantonio.com/default/article/Boosting-retirement-income-Consider-variable-1344068.php#ixzz1KGQtfDkZ

“If your advisor gets paid a commission for selling annuities, as she probably does, she’s not an objective source for you on this topic. Consider investing a few hundred dollars to consult a fee-only financial planner, who can review your financial situation and your investments and offer advice.”

Annuities and structured settlements do share a core similarity: they both can be used to convert a lump sum of money into a series of periodic payments that are disbursed over time.  It is not correct, however, to assume that annuities and structured settlements are one and the same.   To read the original article by Thomas Cochrane, CFA,  click here…

Are you paying taxes now on future income?

The first hidden tax risk, turnover, afflicts investments like mutual funds. Turnover can trigger capital gains, which investors must pay taxes on. For more on hidden tax risks, continue reading here…

Saving money on taxes is as good as making it in the first place.

If you have a civilian or a uniformed services TSP account, this information on a FederalTimes.com blog (A Gannet Company) is for you. Many people are interested in a lump sum withdrawal, especially in these rough financial times.

Here was the question: Q: My wife retired in February. Our current plan is to take $50,000 from her Thrift Savings Plan to pay off some high-interest debt and leave the rest in the TSP to be invested into a monthly annuity. Is this allowed? Does she have options as to what annuity the money is invested in? Is their an option for a lump-sum survivor payment of the unpaid balance at the time of death? How does she proceed with implementing her final decision?

Read the answer here…

For more information on the Thrift Savings Plan, check this webcast out:

Kevin Leier from the Federal Thrift Investment Board discusses the TSP, FERS and CSRS. He discusses managing your account, investment options and withdrawals.