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Annuity Strategies

The Annuity as a Bond Alternative

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 3: Fixed Index Annuities

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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How an Annuity Can Lower the Tax on Social Security

A major point of frustration for many retirees is paying tax on their Social Security benefits.  In some cases an individual or married couple will exceed the income thresholds with pension income and cannot do anything about the tax of their Social Security, but they may be able to control how much of their Social Security is taxed. In other cases by doing some strategic planning, the entire tax ...
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Fixed Annuities as a CD Alternative

When it comes to the typical CD investor, the number one reason that CD’s are used, is the safety that is offered within the CD. The mindset for the CD investor is like Will Rogers quoted, "I am not so much concerned with the return on capital as I am with the return of capital." Of course the appeal is the FDIC insurance of up to $250,000. With CD rates this low, many folks are just leaving their...
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Annuities’ Grand Design: Guaranteeing Income In Retirement

Longevity and good health should be the goal for all of us and it shouldn’t be adverse to our financial situation, but it can be. Because retirees are living so much longer, they also run the risk of outliving their portfolios, especially with today’s market conditions. Modern mortality tables show that there is a 50% chance that a surviving spouse will live to age 92 and a 25% chance that they wi...
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Volatility Controlled Indexes: Everything You Should Know

The most recent innovation in the world of Index Annuities is the Uncapped Point to Point Managed Volatility Index. What makes the Index Annuity a very unique product, is the use of the call option by insurance companies. This allows gains to be realized when an index increases, and no losses to be incurred should the index decline. The price of the call option is what determines how much upside p...
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Using Annuities to Set up the Multi-Generational IRA

The concept of stretching out an IRA to beneficiaries is often not addressed in the financial services community. When one sees how the IRA is taxed to beneficiaries as ordinary income, you can see how this can be a very significant tax that the IRA owner may have never really considered. For this discussion we will assume that a person has rolled over their existing 401k’s or 403b's to IRA’s.  ...
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