Introduction

INTRODUCTION

        We all want the same things in our “Golden Years”; stability, financial security and quality of life.  Continued market fluctuations and skyrocketing debt have pressured investors to explore new areas to insure their long-term retirement needs.  The days of placing your trust in lucrative corporate pension plans are all but gone. Cash and cash alternatives, while they offer safety, have little if any return.  This combined with extended life expectancies makes retirement more expensive.   As company sponsored plans reduce or eliminate matching, more pressure is put on the individual to create their own “personal pension”.  This perfect storm of financial pressures is forcing the hand of individual investors to put their money to work, not out of greed, but out of necessity.  Some wonder, “I insure my car, my health, and my life…how can I insure my retirement?”

       What if you could invest for maximum growth knowing there was a “safety net” below securing your standard of living?  On this site we will take a beginners look at Annuities as compared to stocks and mutual funds on an apples to apples basis. We will briefly touch on the different types of Annuities but for comparison purposes we will focus on Variable Annuities that give the investor market exposure.

       For years the word “Annuity” was a four letter word in less informed circles.  Many pundits questioned the need for guaranteed growth while markets soared.  The last meltdown and ensuing loss of wealth caused many retirees to reduce their standard of living in retirement.   The 2000’s has been referred to as “a lost decade”.   Consider this; the S&P 500 Index (the bench mark of the broad market) was at 1280 in the beginning of 1999!   If only there was a way to know when the market had reached its peak and when to book profits.  The problem is that none of us know.  If we knew the future there would be no need to insure anything in our lives. Why not let an insurance company worry about guaranteeing your future. 

     Variable Annuities allow investors the peace of mind of a guaranteed stream of income based on the market value of their contract.   Think of it like this… Most of us can remember the highest value of our retirement accounts because we look at our monthly statements.   What if your lifetime stream of income (your pension payment) was based on the best monthly statement you ever received?  Some Annuity companies offer that guarantee. This takes the guesswork out of investing and may assist a retiree in maintaining their standard of living through turbulent markets.  This is why the US government is considering letting investors buy Annuities within their 401K’s as discussed on Bloomberg.  

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awbc6h6fJjT4                          

On this site, we will discuss the many misconceptions about modern day Annuities.  Such topics include:

• Dramatic Product Changes Over  the Last Several Years
• Cost of Ownership
• Tax-deferred Growth
• Cost Free Rebalancing and Trading
• Taxation
• Living Benefits
•  Death Benefits
• Wealth Transfer
•  Guarantees

       We will also discuss the role of the advisor and various guidelines to finding the right one.   Annuities, as we will demonstrate, offer benefits that other asset classes just can’t match.  We hope this site is informative and, while it won’t answer all of your questions, we hope it gives you a good starting point.