annuitybasics
In the wake of the stock market crash and rising interest rates, consumers are buying annuities. In fact, in the third quarter of 2022, insurance industry trade group Limra estimates that annuity sales totaled almost $80 billion — just beating the Q2 record of $79.4 billion. As of 2022, consumers are expected to purchase almost $300 billion in annuities. Compared to 2008, which was the previous record year, this would smash it by a wide margin. Fear of stock market volatility and a recession seems to be driving many purchasing decisions, just like during the 2008 financial crisis. In June, the...
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Let’s be real. It can be hard to save for retirement. But, after you figure out how much you need to save for retirement, the real work begins. Obviously, there are a lot of ways to save for retirement. Your main options are 401(k)s through your employer and individual retirement accounts (IRAs). But, there are also annuities. With an annuity, you can grow your retirement savings portfolio in a unique way. Essentially, an annuity is a hybrid between a retirement account and an insurance policy that offers several ways to grow your money. Due to their advantages, annuities are becoming in...
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Annuities, at their core, are simply tax-deferred investments sold by insurance companies to supplement financial security during retirement. At the same time, there are many different types of annuities that make annuities more complex. As a result, Americans may be scared of annuities when considering their financial goals. With that said, one of the most frequent questions people have regarding annuities is, “What happens to my principal?” Well, here’s what you need to know. What is Annuity Principal?One of the main concerns of many retirees is running out of money. In fact, t...
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When to annuitize an annuity is a question that many retirees and people saving for retirement face. After many years of saving and waiting to start reaping the benefits, you finally reach retirement age and wonder: should I annuitize now? In one year? In ten years? Does it make a difference? The answer is yes. Choosing the right time can be the difference between getting the most out of your annuity and leaving money on the table. In light of this, let’s dive into what factors to consider when deciding to annuitize, the pros and cons of annuitizing, and how to do it smartly to enjoy a nice, w...
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Annuities can be complex instruments. They can come in all shapes and forms, from immediate to deferred, from fixed to variable, from single life to joint life and everything in between. However, no matter how complex and seemingly custom-tailored, no annuity is ever perfect. That said, you can make them as good as you want by adding one or more annuity riders. If you’re wondering what that means, this post discusses what annuity riders are, how they work, their pros and cons, and the most common options insurance companies will offer when crafting the perfect contract. What are annuity riders...
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We recently wrote a piece showing how much income you can expect to receive every month from different types of annuities, including fixed, immediate income annuities and deferred income annuities. While that post is very useful to get a general idea of how much income you stand to receive based on how much you invest and for how long, those numbers are no more than estimations because there are many variables involved in the calculations and those variables are unlikely to agree perfectly with what your issuer will ultimately offer. That’s why it’s important to learn how to calculate annuity ...
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About a month ago I booked a flight to see one of my best friends. Considering that we’re still dealing with COVID-19, I decided to to purchase travel insurance. And, good thing I did. A couple of days before I was to take off, my friend and his family all tested positive. Thankfully, I was able to get my money back because of the insurance I had added-on to my trip. Outside of travel insurance, many of us buy warranties for phones, appliances, or HVAC systems. After all, it’s worth the additional cost instead of completely replacing these items. And, in a way, annuities also offer guarantees ...
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