How To Choose The Best Annuity

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Let’s suppose you have already decided you would like to purchase an annuity. So how do you pick the right annuity? What should you be looking for and how do you know the annuity that you are looking at is the best option available to you within the many products available in today’s annuity marketplace? The key to this is you have to determine the financial objective you are trying to achi...
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What is an Income Rider?

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The newest feature annuities are promoting is the Guaranteed Minimum Income Benefit Rider, or also known as the Guaranteed Minimum Withdrawal Benefit Rider, or simply the Income Rider, which we will use in this analysis for simplicity’s sake. Let’s take an in-depth look at just how these riders work and see if it is something you should have. Originally annuities were designed to provide a ...
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What is an Annuity?

Posted on by wcfsannuities
An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or series of premiums you have paid. Annuities were originally designed to provide income for life starting either right away, which are known as Immediate Annuities, or starting at a later date, which are known as Deferred Annuities. With a Deferre...
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The Annuity as a Bond Alternative

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In the past bonds have been effectively used as an additional asset class to reduce the risk of holding a 100% stock portfolio. The traditional 60/40 mix of stocks and bonds has defined the moderate portfolio for years, and today target maturity mutual funds are commonly used, which will increase the bond allocation as one nears retirement to reduce the overall portfolio risk. With today’s hist...
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Types of Annuities Part 1: Immediate Annuity

Posted on by wcfsannuities
An immediate annuity is where a lump sum has been turned into an income stream. The lump sum is no longer available, but instead a guaranteed income is being received that can payout over a person’s life expectancy. Overall the returns credited to an immediate annuity are very low, but the income guarantee is the real benefit. Have you ever heard that if you set up an annuity and die, t...
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Types of Annuities Part 2: Fixed Annuity

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A fixed annuity is the simplest annuity for consumers to understand. You simply receive a rate of return determined ahead of time. Many present the fixed annuity as a CD alternative.  It is in the guaranteed principle category of investments, and is one of the safest investments for consumers available today. There are two basic types of fixed annuities: Traditional Fixed. In the ...
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Types of Annuities Part 3: Fixed Index Annuities

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The most recent type of annuity to be introduced, the fixed index annuity or FIA, has quickly become one of the top selling annuities in the marketplace today. It also has been the target of many in the financial services industry, as with its complexity, it has caught the attention of many skeptics. Let’s go over the main features for now and tackle the in depth details in another post “What D...
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What Determines The Returns In An Index Annuity

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Let’s look into the crediting methods within the Index Annuity, which is where the rubber meets the road for performance. This is where most investors get lost and either have to shop for themselves, or have to rely completely on their agent to find the best products available. The three most common crediting strategies we see today within Index Annuities, are the Annual Point to Point (AP2...
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Types of Annuities Part 4: Variable Annuity

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The variable annuity is really just an option to use mutual fund type of investments within an annuity. Depending upon the choices used within the annuity, the account value can be very risky if stock mutual funds are used or fairly conservative if bonds funds are used. Fees There is no doubt variable annuities (VA’s) can have high fees and this has raised a lot of red flags throughout t...
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Types of Annuities Part 5: Longevity Annuities (Qualified Longevity Annuity Contracts, QLAC)

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A longevity annuity, or QLAC, provides protection against outliving your money if you or your spouse have good longevity. Also known as an advanced life delayed annuity, this type of annuity requires you to wait until you reach age 80 or later, to begin receiving a payout. Once the payout begins, the annuity provides a guaranteed regular amount of income for the rest of your life. These are...
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