Author Dan Kadlec (cited below) stated in his article that “Lifetime income has emerged as perhaps the biggest retirement challenge of our age. The gradual shift from defined benefit plans to defined contribution plans over the past 30 years has begun to leave each new class of retirees without [continued below video…]

{continued] …the predictable, monthly stream of cash needed to cover basic expenses. ”

It is a fact that more and more employers are moving to a 401k style retirement plan and away from the defined benefit plans enjoyed by past generations. Some of the biggest national employers are doing everything they can to unload their pension obligations by offering lump sum buyouts or turning the pension program over to insurance companies.

So we can postulate that the reason for increased annuity sales now and perhaps in the foreseeable future have more to do with the financial needs of today’s retirees as compared to past generations; and some of the increased sales may also be the lack of safe money options from other sources such as low bank interest rates that have left income needy retirees without many other alternatives for safe income or moderate growth options.

Need Retirement Income? Here’s the Hottest Thing Out There

by  Dan Kadlec

Sales of fixed annuities are surging as income-strapped retirees seek ways to rescue their retirement plans.

Annuity sales are exploding higher as retirees look to lock up **guaranteed lifetime income in an environment where fewer folks leaving the workplace have a traditional pension. In a sign of wise planning, easy-to-understand basic income annuities are among the fastest growing of these insurance products.

In all, net annuity sales reached $56.1 billion in the first quarter—up 13% from a year earlier, based on data reported by Beacon Research and Morningstar. Variable annuities, often seen more as a tax-smart investing supplement for the wealthy than a vehicle for lifetime income, account for most of the market. These annuities, which essentially let you invest in mutual fund^{^}s with some insurance **guarantees, saw first-quarter net sales of $33.5 billion—down slightly from a year ago.

Meanwhile, net sales of fixed annuities, which offer more certain returns, surged to levels last seen in the rush to safety at the height of the Great Recession—totaling $22.6 billion for the quarter. Fixed annuities come in simple and complex varieties—those indexed to the stock market can be confusing and laden with fees. But the subset known as income annuities—the most basic and straightforward of the lot—grew at a 50% clip versus 44% for the index variety.

Basic income annuities, also known as immediate annuities, remain a tiny portion of the overall $2.6 trillion annuity market. Yet they are what most investors think of when they ponder buying an income stream. With an immediate annuity you plunk down cash and begin receiving pre-set over a period of, say, 10 or 20 years, or life. Rates have been relatively low, as they are for most fixed-income investments. Recently a 65-year-old man investing $100,000 could get a lifetime payout of 6.6%, according to [Read more…]

Using OutCome Based Planning for Your Retirement

We practice and recommend a "Holistic - OutCome Based Planning process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.

"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available.

"Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"

Get Full Video Access & Our Library Edition - Annuity Reference Book

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  ^** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
They are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

  ^*Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping our website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this website. He still maintains his insurance license in good standing and assists his current clients.
Our vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)

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9. MarketFree Annuity Definition: Any fixed annuity or portfolio of fixed annuities that protects principal / premium and growth by remaining market risk free.
10. Market Free (annuities, retirements and portfolios) refer to the use of fixed insurance products with minimum guarantees that have no market risk to principal and are not investments in securities.
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The post Why are Markets and Annuity Sales at All Time Highs? appeared first on Annuity Guys®.

The level of recent volatility makes even the most staunch buy-and -hold investors take notice; and for those counting on their investments to fund an impending retirement, it can…[continued below video]

Video: Annuity Guys Dick and Eric talk about the roller coaster ride the market has experienced lately and how MarketFree® Annuities might help smooth out the ride.

**Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

…create extreme anxiety and sleepless nights. For near retirees who have enjoyed the recent bull market run and feel positive about their ability to fund a comfortable retirement. Now may be a great time to secure that retirement by protecting some of those gains.

In 2008 and 2009, we spoke with numerous pre-retirees who were distraught because their retirement plans were decimated when their IRAs and 401ks lost 20-50% over the course of just a few months. Discussions went from talking about traveling and spending time with family to serious deliberations about working longer and downsizing homes. Now, does volatility of this level imply that a correction or bear market is imminent? We are not so bold as to predict it; but would it be nice to not  have to worry about it at all?

Some of the best conversations we have ever had were with clients who had allocated a portion of their portfolios to annuities in 2007. These clients were able to protect their gains by using MarketFree® Annuities thereby eliminating the market risk. By allocating a portion of their assets into annuities, they were able to smile knowing that they did not lose any of those annuity dollars during the severe market down turn of The Great Recession. In contrast to those who were  directly in the stock market of 2008-2009 who lost their money our MarketFree® annuity clients were actually making money!

One of my favorite phone calls of all time was in 2010 from a client concerned because his annuity payment had increased and he wanted to make sure he could keep the money. What he had forgotten was that his annuity contract provided for an increase to his income when his annuity grew. He was ecstatic – not only did he survive the recession with all his assets intact, he actually benefited from the market downturn which allowed his indexed annuity to reset to the lower level in 2009 and produce gains without having to overcome the 30% losses of the stock market first.

Using a MarketFree® Annuity to protect principal and provide modest interest gains coupled with for life can be a solid strategy for both retirees and pre-retirees. This strategy removes the uncertainties of requiring market performance and replaces it with safety of principal, income predictability and some interest gains from upward market movements .

The post Market Volatility is Back! Are MarketFree™ Annuities an Answer? appeared first on Annuity Guys®.

Many economist and market watchers have been proclaiming an end to the bull market for months and the recent drops have sent many investors scrambling for safety. Now that we have seen many indexes drop into “correction level” (a polite way of saying they have lost 10%) the big question is … [continued below video]

 Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

[continued below]…are we poised for a new bull run or are we in for a more serious drop of another 10 to 20 percent or even far more?

Can you get strong growth from an annuity during a bear market? Certainly! You can even utilize a fixed annuity and typically **guarantee a fixed return of 2 to 3 percent at present rates. However, a fixed index annuity (hybrid style) can benefit from resetting during a bear market, which typically creates more growth potential because fixed index annuities can reset to a new lower indexing point during a bear market – they do not have to grow back to their high point to begin accumulating gains. According to various studies of past performance, index annuities have the realistic potential to earn from 4 to 6% interest annually while protecting principal!

Trying to time the market can be extremely difficult for professionals, especially for individual investors. Riding out a bear market for some is “un-bearable” – they cannot handle the emotional roller coaster. Annuities can be an answer for those people hoping to move a portion of their portfolio into a safer financial growth alternative – safer option that offers a far greater upside potential than just sitting in cash or riding a market down.

Read more on this subject in this article:

 Shiller: Average CAPE Ratio Puts S&P at 1,300, Dow at 11,000

Nobel laureate economist Robert Shiller of Yale University says his indicator shows that the current stock market values are overinflated and will only crash even lower.

Shiller invented the cyclically adjusted price to earnings ratio (CAPE), a key indicator for stock market crashes.

“It is entirely plausible that the shaking of investor complacency in recent days will, despite intermittent rebounds, take the market down significantly,” Shiller wrote in the New York Times.

According to Shiller’s CAPE ratio, the stock market is significantly overvalued. The metric modifies historical price-earnings ratios to account for business cycles. Between 1881 and 2015, CAPE averaged a ratio of 17, well below today’s reading of 27.

Shiller said his indicator would put the S&P closer to 1,300 from around 1,988 on Friday, and the Dow at 11,000 from around 16,643.

“We are in a rare and anxious “just don’t know” situation, where the stock market is inherently risky because of unstable investor psychology,” he said.

“There are reasons to question whether this was a quick, effective slap on the wrist, or if the market is still too overactive, and thus asking for a more extended punishment,” he said.

“Ten percent drops in the S&P 500 in just five trading days — such as what we just experienced — have not been common. Out of the 29 corrections since 1950, only nine happened in five days or less,” he said.

“Most of those happened since 2000, possibly because of the Internet and faster communications. Such rare sharp drops are psychologically significant; an extreme one-day collapse seems to create anxiety that imprints on people’s memories and could contribute to a downward momentum.”

All of the recent market volatility could help drive investors away from stocks for years, says ace hedge fund manager Doug Kass, president of Seabreeze Partners Management. [Read More at NewsMax]

The post Is Strong Growth from Annuities Likely in The Looming Bear Market? appeared first on Annuity Guys®.

Just like  the tortoise in Aesop’s story, hybrid annuities are steady and consistent in their pace; and while they may take an occasional break, they never go backwards. Like our friend, the hare, the equities markets at times run so fast and hard – they occasionally get out of control and crash…[continued below video]

Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified. 

Will the tortoise win every time? No. Nor will the hybrid or fixed index annuity beat the equities markets most of the time. Like our friend, the tortoise, index annuities are designed for steady consistent results.

There are thousands of varieties of index annuities and strategies that can be chosen and some have more growth potential than others based upon their design . Everyone would like to have their cake and eat it too; but let’s be frank, some annuities perform better for income and others have greater growth potential – while others try to balance both growth and income (unfortunately, not excelling at either). Now, we don’t mean to shock you. But all of these annuities can beat the market – given the right conditions.

In a down market, even an annuity that only credits a zero surpasses the losses of 20 or 30 percent. Hybrid style annuities (aka fixed index annuities with an income rider) have the best opportunity to beat the  popular market indexes during periods of higher volatility because they can capture a portion of the upside market gains without experiencing any of the losses. So when the market acts like a roller coaster – shooting up and down  – index annuities have an advantage by periodically locking in their gains. However, based upon history, we can assume that eventually the markets will surpass the gains made by any annuity – given that you have enough time. Unfortunately, many retirees don’t have time to recover or the fortitude to accept the uncertainty of what the future may hold.

The elimination of investment risk and pension style income **guarantees are key factors for most retirees. Annuities can provide safety, security and peace of mind to retirees who know they may need their money to last twenty to thirty years or more while enjoying this stage of life. Hybrid annuities may occasionally beat the market but it is their rock-solid contractual **guarantees that more often than not make them attractive options for retirees.

Would you like to see the  Wharton Study Dick mentioned in the video – Wharton Study of Index Annuity Returns.

Using OutCome Based Planning for Your Retirement

We practice and recommend a "Holistic - OutCome Based Planning process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.

"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available.

"Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"

Get Full Video Access & Our Library Edition - Annuity Reference Book

Is Your Annuity Advisor a Salesman or a Fiduciary?
2024 Advisor Report

Priority Mail - Free Shipping!

After confirming your request for help and shipping address by phone, we will immediately send your FREE personally signed Library Edition of our popular Annuity Reference Book "The New Retirement" plus Fact-Filled, Full Video Access!