Archive | Annuities

Worried_People_4

Annuity. It is an insurance product.

Markets are getting long in the tooth. People are concerned a correction is due since a correction historically has typically happened by now.  Thus, nervous people remembering 2008, seek some way to protect their savings. One of those ways has been through an annuity of some kind issued by an insurance company. What people need […]

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monthly payments

Budgeting – obsolete!

I can’t write this any better than Michael Kitces, so here’s his quote about the article by Helaine Olen linked to below. “Toss Your Budget. Why a pillar of personal finance isn’t nearly as essential as we think.” Quote: Toss Your Budget (Helaine Olen, Slate) – Despite the ‘conventional wisdom’ of budgets, a recent Gallup poll found […]

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Two views of retirement

Summary: Two schools of thought on retirement income.

Retirement income management boils down to basically two schools of thought … Probability Based School and the Safety First School. Wade Pfau has a summary on his blog, and I’ve written on the comparisons as well. Wade is an advocate of the Safety First School in general while I’m an advocate of the Probability Based […]

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Your_Plan_illustration

How do you picture retirement?

Most people mentally picture getting to, and then through, retirement as a straightforward and linear path. Of course, that is desirable. But is this a realistic expectation? Some advisers may suggest the top path is possible by emphasizing “safety first.” This comes from Social Security and/or a pension (if you have one like your grandparents had). […]

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Variable Annuity

Can Variable Annuities Really Offer Insurance Guarantees Against A Market Catastrophe? | Kitces.com

Michael Kitces does an excellent job summarizing what I’ve said for a long time in his article Can Variable Annuities Really Offer Insurance Guarantees Against A Market Catastrophe? | Kitces.com. Everyone participates in the same markets and Fama/French, two well know academics to the investing world, find no evidence that anyone has consistently (year in and year […]

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Pensions

What does it mean to say a Pension is Underfunded?

When you read or hear about a Pension Plan being underfunded, what does that mean? It means they don’t have enough assets to cover their liabilities. Assets are the pension plans investments. Liabilities are the payments to retirees. Underfunding is a wide spread problem today according to this study cited in Financial Advisor Magazine. So what […]

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retirement

When should you get an immediate annuity? – Updated

I always marvel at a good writers’ ability to digest a complex topic down to its’ essence! Robert Powell did just this in his article titled When are income annuities right for you? Rather than steal his thunder, I recommend you read his article for yourself. Source:  Robert Powell’s Retirement Portfolio (Wall Street Journal’s Market Watch) Sept. 7, 2013, 6:00 […]

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retirement

When should you get an immediate annuity?

It turns out, much later than most imagine. And, in some cases, they don’t make sense at all. My paper, co-authored with Dr.’s John Mitchell and Wade Pfau, provides insight and guidance for the retiree decision making between whether to annuitize or manage their retirement savings for income. Tables and graphs demonstrate the breakeven age between annuitizing with a single […]

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probability

Two schools of retirement income thought

You may not be aware of it, or in which you fall, but there are generally two retirement income schools of thought. One school of thought is the “safety first” school and the other is the “probability based” school of thought. Neither is right or wrong, it essentially comes down to each retiree’s decision. Safety First […]

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too big to fail

Too big to fail? Getting the thoughts going …

Here is a guest post by Dr Wade Pfau on his blog (his bio on his blog page) of a segment of a longer email conversation he and I had about the possibility the big push to “solve” the retirement issues exposed by the Great Recession may be a setup for insurance companies to become too big […]

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