Why 2015 is the year for longevity annuities?
's Jean Chatzky explains:
We realize the industry has failed to adequately explain how "yesterday's" annuities function to provide guaranteed income. As a result, the negative connotations ascribed to annuities has transferred over to income stream annuities. To help people better understand the benefits of a fixed income stream annuity, we need to change the language and educate our clients about what liquidity in retirement really means.
Liquidity should be understood in terms of having guaranteed income that cannot be outlived. At retirement, the changes of needing all of our assets to be liquid in order to make a purchase, deal with something unexpected or be vulnerable to bad investment or purchase decisions is remote.
Take the first step towards guaranteed lifetime income and reach out to us today:
Guidance & Advice
What is longevity risk?
The risk of living too long and outliving your wealth is known as longevity risk.
What is causing longevity risk to be the number one risk associated with living longer?
Extended life expectancy is creating a simple but serious problem for a huge number of people in the U.S. For most people at retirement age, income begins to reduce or disappear completely. The combination of low interest rates, loss of income and extended life expectancy are the 3 prongs of longevity risk.
Is there an effective and affordable solution for longevity risk?
Yes. Converting a portion of your invested assets to an insurance company in exchange for a guaranteed lifetime income solution is remarkably effective hedge against longevity risk. Adding income is another solution to hedge away this risk.
Upon death, does the insurance company keep the money?
No. Structured properly, the listed beneficiaries will receive all the remaining or unpaid money within the policy.
Why use an annuity?
Fixed indexed annuities are not subject to stock-market-based losses and the issuing insurance company provides contractual guarantees. As a result, they are among the safest and best solutions to fund retirement income.
Key Questions to Consider About Your Retirement Financial Plan
1. How are my assets hedged against longevity risk? In other words, how am I protected from outliving my money?
2. What is the plan if I actually do end up depleting my resources during retirement?
3. How are my assets hedged against sequence of returns risk? In other words, how am I protected from having my retirement plans crushed by exactly what has recently occurred in the markets?
4. How are my assets hedged against inflation risk?
5. What is the plan to create income during my retirement? Is this level of income both adequate and sustainable?
6. What analytic tools and methods are used to determine and demonstrate that there is reasonable probability that my retirement income projections are both adequate and sustainable?
7. What are our fixed expenses projected to be during retirement? How much of these fixed expenses do we want to guarantee?
8. How would a long term care event for either of us affect our current retirement plan?
Tips for Making a Wise Annuity Purchase
- Know what kind of annuity you are purchasing.
- Is it fixed, variable or deferred?
- What is the term if you are purchasing a deferred annuity? Know the length of the term before you buy otherwise you may pay a surrender fee that may cancel any earned income from your investment.
- What is the surrender penalty?
- Don't take out a reverse mortgage to finance an annuity: A reverse mortgage is basically a loan you take out against the equity you have accumulated in your home. The loan will have to be paid back with interest at the time the house is sold or by the estate of the borrower.
- Beware of scare tactics that appeal to your emotions.
- Get a second opinion: Do not make a significant financial investment without talking to experienced financial advisors and consulting with friends and family members you trust.