Saturday, September 24, 2005
Annuity News and Annuity Information
There is a good resource for annuity news and information that I thought I would tell you about. It seems to give good references to sites that have good resources. Check it out and we will keep an eye to see if good annuity help can be found there. IT can be found by clicking on the words Annuity News.
Thursday, September 15, 2005
Annuities and the Economy
Well, it's no secret that we are going through tough times right now. Yes, oil prices are up and the economy is sluggish at best. Add a devastating hurricane in the mix and we could be in for some tough times. So what does this have to do with annuities? Well, annuities can be multi-faceted vehicles. Variable annuities can provide upside in good markets and downside protection (not a fan of for the most part). Fixed annuities can provide shelter from a falling market and declining interest rates. Equity index annuities can give a little of both.
Whatever the situation is, annuities may or may not fit. However, the point I want to make is, your investment strategy should not be based on fear or greed. Nor should it be based on the economy. It should be based on a well thought out plan. If annuities fit nicely in your plan, then use them. If they don't fit, then forget about it. However, it is important to constantly assess your financial situation. Find investment vehicles, and or proper annuities that can fit YOUR situation.
And last of all, always be careful of the optimistic economists that say the market has to bounce back...because it doesn't. Stock markets never do what we expect. Save some money for a rainy day and don't hesitate to be cautious with your investments. The same go for annuities. Tomorrow, I will be talking about how choosing the right annuities, especially in this type of economy, can be so critical.
Until then...
IGNORANCE IS NOT BLISS!
Yours Truly...
Whatever the situation is, annuities may or may not fit. However, the point I want to make is, your investment strategy should not be based on fear or greed. Nor should it be based on the economy. It should be based on a well thought out plan. If annuities fit nicely in your plan, then use them. If they don't fit, then forget about it. However, it is important to constantly assess your financial situation. Find investment vehicles, and or proper annuities that can fit YOUR situation.
And last of all, always be careful of the optimistic economists that say the market has to bounce back...because it doesn't. Stock markets never do what we expect. Save some money for a rainy day and don't hesitate to be cautious with your investments. The same go for annuities. Tomorrow, I will be talking about how choosing the right annuities, especially in this type of economy, can be so critical.
Until then...
IGNORANCE IS NOT BLISS!
Yours Truly...
Friday, September 02, 2005
Hurricane Victims
I am sorry to take a short pause from writing about annuities, but I feel there is something more important to write about.
I would just take a moment to offer up my prayers to the hurricane victims. This was a tragic event and I hope you will take the time to contribute a little something for these victims. It is times like this where every little bit helps. If you don't know how to help, please go to:
Red Cross Donation Page
This is the donation form for the Red Cross. You can choose to make a donation specifically to this cause.
Thank you and my deepest prayers go out to these victims and their families.
Sincerely,
Tony Bahu
Annuity
Annuities
Fixed Annuities
Index Annuities
Immediate Annuities
I would just take a moment to offer up my prayers to the hurricane victims. This was a tragic event and I hope you will take the time to contribute a little something for these victims. It is times like this where every little bit helps. If you don't know how to help, please go to:
Red Cross Donation Page
This is the donation form for the Red Cross. You can choose to make a donation specifically to this cause.
Thank you and my deepest prayers go out to these victims and their families.
Sincerely,
Tony Bahu
Annuity
Annuities
Fixed Annuities
Index Annuities
Immediate Annuities
Tuesday, August 16, 2005
Equity Indexed Annuities
Okay, so I am still getting many questions regarding the index annuity. And here is what you need to know.
First and foremost, it is a fixed annuity and not a variable annuity. This means under normal circumstances (no insurance company insolvency, holding the product until maturity), you won't lose money. In fact, they inherently have minimum guarantees meaning if you hold them until maturity, you will be guaranteed to make some money for the most part.
The next thing about the equity indexed annuity is that it is not designed to beat the market. In fact, under most circumstances, it will not beat a normal market over time. It is designed to beat the fixed markets under the right conditions by 1 to 2 percent. This means it is not for the investor who wants to take chances and isn't afraid to lose money. ANd it's not for the investor who wants all the upside. It is for the risk averse investor who wants a fixed annuity to perform better than the fixed markets.
Last of all, there are many choices when it comes to the index annuity. There are good and bad choices. But most importantly, what makes them so is what is right for you. Features are only as good as the need! So the best thing is to do your homework. That's the bottom line. IT is not a good idea to trust your annuity agent. IT is best to do your own research. IF you need help, go to AnnuityMD.com and see the information there.
Ignorance is Not Bliss.
Sincerely,
Tony Bahu
CEO
AnnuityMD.com
By the Way, I have been asked to post some resources for foreclosures so here they are:
Foreclosed Homes
Foreclosed Houses
Realestate Foreclosures
First and foremost, it is a fixed annuity and not a variable annuity. This means under normal circumstances (no insurance company insolvency, holding the product until maturity), you won't lose money. In fact, they inherently have minimum guarantees meaning if you hold them until maturity, you will be guaranteed to make some money for the most part.
The next thing about the equity indexed annuity is that it is not designed to beat the market. In fact, under most circumstances, it will not beat a normal market over time. It is designed to beat the fixed markets under the right conditions by 1 to 2 percent. This means it is not for the investor who wants to take chances and isn't afraid to lose money. ANd it's not for the investor who wants all the upside. It is for the risk averse investor who wants a fixed annuity to perform better than the fixed markets.
Last of all, there are many choices when it comes to the index annuity. There are good and bad choices. But most importantly, what makes them so is what is right for you. Features are only as good as the need! So the best thing is to do your homework. That's the bottom line. IT is not a good idea to trust your annuity agent. IT is best to do your own research. IF you need help, go to AnnuityMD.com and see the information there.
Ignorance is Not Bliss.
Sincerely,
Tony Bahu
CEO
AnnuityMD.com
By the Way, I have been asked to post some resources for foreclosures so here they are:
Foreclosed Homes
Foreclosed Houses
Realestate Foreclosures
Sunday, July 17, 2005
Annuity Information
I received this e-mail today:
"I'm tempted to buy your report, but I would like to know what your credentials and experience are in this area. How detailed is your article and are there any guarantees with refunds?
Thanks,"
This e-mail really caused me to want to answer. The reason is because I feel there is a lot of bad information out there on annuities. Here was my response.
I know you have hesitations as everyone does. However, we have been successful at educating consumers across the country and empowering them. What you want to know is that we will not try to sell you an annuity. Our goal is to make sure that you make the right decisions about your future. Furthermore, if you have any questions following the reading the report, you will have full access to our customer service who can answer all of your unanswered questions.
As for my credentials, I was involved in the financial industry for years. I specialized in the annuity arena and got sick of all the stories of how people got screwed by the insurance companies and their agents. My frustration led me to take notes about every aspect that consumers fell victim to causing them agony in their financial lives. Following the gathering of all this information, I put it in a book form and it was intended to be for my own personal use. My friend suggested I put it on the internet and the response has been overwhelming.
The bottom line is, there are only two types of annuity information available on the internet and they are both free. The first kind is all the positive information by the people who sell annuities. The second is all negative written by the media for the hype. Our information is the ONLY non-biased information on the internet and our goal is to EDUCATE and EMPOWER not to sell you an annuity or scare you. We don’t make money selling annuities and that is why we charge for our information. This is how we make our living!
So, it’s your decision. I am confident that we can help you avoid at least one mistake you may have made without our information. I hope I come across sincerely when I say this.
And as far as the guarantee, we had it on for a long time. Unfortunately, people in the industry abused it. We found we were getting returns from only people in the industry. They were curiosity seekers that were trying to take advantage of our information. Our satisfaction rating among non-industry people was almost at 100%. We instituted a customer support feature shortly thereafter and make sure everyone who buys the book gets exactly what they want out of it. That has proven better than any guarantee because we really care that our clients get the right information. We still sell about 30% of our sales to the industry. However, now since they know they can’t return it, we get rave reviews even from the industry. We have even put several industry professional’s testimonials on our page to show that anyone of any experience level can benefit from this information.
As far as details, it goes into all aspects of the annuity that you need to know about to make an educated decision. The list on the website is very comprehensive and we cover all of these areas.
I hope this helps.
Sincerely,
Tony Bahu
CEO
AnnuityMD.com
Annuities
"I'm tempted to buy your report, but I would like to know what your credentials and experience are in this area. How detailed is your article and are there any guarantees with refunds?
Thanks,"
This e-mail really caused me to want to answer. The reason is because I feel there is a lot of bad information out there on annuities. Here was my response.
I know you have hesitations as everyone does. However, we have been successful at educating consumers across the country and empowering them. What you want to know is that we will not try to sell you an annuity. Our goal is to make sure that you make the right decisions about your future. Furthermore, if you have any questions following the reading the report, you will have full access to our customer service who can answer all of your unanswered questions.
As for my credentials, I was involved in the financial industry for years. I specialized in the annuity arena and got sick of all the stories of how people got screwed by the insurance companies and their agents. My frustration led me to take notes about every aspect that consumers fell victim to causing them agony in their financial lives. Following the gathering of all this information, I put it in a book form and it was intended to be for my own personal use. My friend suggested I put it on the internet and the response has been overwhelming.
The bottom line is, there are only two types of annuity information available on the internet and they are both free. The first kind is all the positive information by the people who sell annuities. The second is all negative written by the media for the hype. Our information is the ONLY non-biased information on the internet and our goal is to EDUCATE and EMPOWER not to sell you an annuity or scare you. We don’t make money selling annuities and that is why we charge for our information. This is how we make our living!
So, it’s your decision. I am confident that we can help you avoid at least one mistake you may have made without our information. I hope I come across sincerely when I say this.
And as far as the guarantee, we had it on for a long time. Unfortunately, people in the industry abused it. We found we were getting returns from only people in the industry. They were curiosity seekers that were trying to take advantage of our information. Our satisfaction rating among non-industry people was almost at 100%. We instituted a customer support feature shortly thereafter and make sure everyone who buys the book gets exactly what they want out of it. That has proven better than any guarantee because we really care that our clients get the right information. We still sell about 30% of our sales to the industry. However, now since they know they can’t return it, we get rave reviews even from the industry. We have even put several industry professional’s testimonials on our page to show that anyone of any experience level can benefit from this information.
As far as details, it goes into all aspects of the annuity that you need to know about to make an educated decision. The list on the website is very comprehensive and we cover all of these areas.
I hope this helps.
Sincerely,
Tony Bahu
CEO
AnnuityMD.com
Annuities
Monday, June 20, 2005
Understanding Equity Index Annuities
Lately, I have been trying to research how people explain the equity index annuity. I have to tell you that most every description I read of it is wrong. People seem to misunderstand this vehicle completely and I don't know why. It is not that confusing, but unfortunately, the equity index annuity gets described wrong constatnly.
I recently wrote information on the equity index annuity. It is probably the most comprehensive and simple explanation of how ti really works. I have only had it as an upgrade to 'The Shocking Truths' book but I feel like I would like to have it as a stand alone.
I am asking for your feedback. IF you think you would appreciate to have this package available as a stand alone product, let us know by sending us a message at support@AnnuityMD.com. If the feedback is good, we will release this package as a stand alone. Again, it explains the EIA in a way nobody really has, and it comes with an audio cd highlighting the important points of the book and of The Shocking Truths book. I will soon let you know how the response is. Until next time...
Ignorance IS Not Bliss.
Tony Bahu
I recently wrote information on the equity index annuity. It is probably the most comprehensive and simple explanation of how ti really works. I have only had it as an upgrade to 'The Shocking Truths' book but I feel like I would like to have it as a stand alone.
I am asking for your feedback. IF you think you would appreciate to have this package available as a stand alone product, let us know by sending us a message at support@AnnuityMD.com. If the feedback is good, we will release this package as a stand alone. Again, it explains the EIA in a way nobody really has, and it comes with an audio cd highlighting the important points of the book and of The Shocking Truths book. I will soon let you know how the response is. Until next time...
Ignorance IS Not Bliss.
Tony Bahu
Thursday, June 16, 2005
Forget Annuities...Let's Talk Babies!!!
Well, I am pleased to inform you that my wife and I had a healthy baby boy this morning!!! He weighed in at 8 pounds and 8 ounces. Hopefully this explains the lack of blogging over the past several days. I would like to also take this opportunity to thank you all for the wonderful e-mails you have sent us and the support you have given us! I know this is a newsletter about annuities, but our families are why we work hard and invest our money, right? Hopefully you always keep that in mind and keep your family first in life.
As for annuities, yes many new developments and we definitely need to catch up. I would like to clairfy some things that we talked about earlier regarding New Jersey and Allianz annuities. We will hopefully do that soon. And remember, for the whole truth about annuities, please visit us at http://www.AnnuityMD.com. Until then, thank you again for all of your support. Wishing you the best, and remember...
Ignorance AIN'T Bliss!!!
As for annuities, yes many new developments and we definitely need to catch up. I would like to clairfy some things that we talked about earlier regarding New Jersey and Allianz annuities. We will hopefully do that soon. And remember, for the whole truth about annuities, please visit us at http://www.AnnuityMD.com. Until then, thank you again for all of your support. Wishing you the best, and remember...
Ignorance AIN'T Bliss!!!
Thursday, June 09, 2005
No Defined End of Term
Okay, so here is the situation. The attorney general in the state of New Jersey is cracking down. They are banning annuities that have what is called a two-tier annuity products and furthermore, they are looking to do the same with annuities that have surrender charges in excess of 10%.
Now, as far as two-tiered annuities, they have no defined end of term. This means that no matter how long you keep the money in, it has to stay in until you 1) stay in for a defined period and 2) take your money out over a defined period. It calls for two sets of action in order to free yourself of a surrender charge. It is somtimes not a great deal for the client.
One company who was hit by this legislation was Allianz. In fact, some of their products operate this way. As a result, some of their portfolio is allegedly being pulled from the state of New Jersey. This is very interesting news in the annuity industry seeing that Allianz is the biggest seller of equity indexed annuities in the country. If this trend carries over to other states, Allianz may certainly take a significant hit in sales.
One thing I would like to clarify is this. My biggest problem with two-tiered annuities is that many brokers have no clue how to explain these to their clients. Furthermore, what's worse is for the most part, they DON'T explain it to the client. Therefore, the client may hold the annuity for a long time and come to find out they must take their money out over an additional period (usually 5 years). THE WORST PART IS, no matter how long they hold it for, they will never be able to take out their money without going through the second tier (by withdrawing the money over a certain number of years) without being assessed a penalty. AGAIN, my biggest problem isn't the way they work---it's that clients don't know that's what they are getting in to.
Well, it looks like the regulators are finally starting to target the insurance industry. Again, not every two-tiered is bad but knowledge is power. Keep this in mind as you do your homework on annuities.
For more information on what you need to know about annuities, please visit:
Annuities: The Shocking Truths Revealed (please click on the link)
Ignorance Is NOT Bliss
Now, as far as two-tiered annuities, they have no defined end of term. This means that no matter how long you keep the money in, it has to stay in until you 1) stay in for a defined period and 2) take your money out over a defined period. It calls for two sets of action in order to free yourself of a surrender charge. It is somtimes not a great deal for the client.
One company who was hit by this legislation was Allianz. In fact, some of their products operate this way. As a result, some of their portfolio is allegedly being pulled from the state of New Jersey. This is very interesting news in the annuity industry seeing that Allianz is the biggest seller of equity indexed annuities in the country. If this trend carries over to other states, Allianz may certainly take a significant hit in sales.
One thing I would like to clarify is this. My biggest problem with two-tiered annuities is that many brokers have no clue how to explain these to their clients. Furthermore, what's worse is for the most part, they DON'T explain it to the client. Therefore, the client may hold the annuity for a long time and come to find out they must take their money out over an additional period (usually 5 years). THE WORST PART IS, no matter how long they hold it for, they will never be able to take out their money without going through the second tier (by withdrawing the money over a certain number of years) without being assessed a penalty. AGAIN, my biggest problem isn't the way they work---it's that clients don't know that's what they are getting in to.
Well, it looks like the regulators are finally starting to target the insurance industry. Again, not every two-tiered is bad but knowledge is power. Keep this in mind as you do your homework on annuities.
For more information on what you need to know about annuities, please visit:
Annuities: The Shocking Truths Revealed (please click on the link)
Ignorance Is NOT Bliss
Tuesday, June 07, 2005
The Annuity Industry Had Better Rethink This
I do believe that one of the problems in the annuity industry is that in order to sell fixed and index annuities, all one needs is an insurance license. That means, your annuity agent may not have ANY formal education in the financial arena...THAT'S SCARY.
For you to entrust someone with that kind of money, and for him to have no financial education is a sin. Now, don't get me wrong, some of the agents are VERY well educated. But if you think of the new agent entering the market, they may have little or no experience with investing matters.
This to me is something the insurance industry should rethink. You see, fixed and index annuities (index annunities are glorified fixed annuities for lack of a better explanation at the present) do not have the stipulations that securities have on them. This leaves a lot of room more abuse and I truly think that should be changed.
The insurance industry should, without a doubt, require formal FINANCIAL training for someone who wants to sell annuities. I will say this forever and continue to push for it. Just trying to say that I believe it is necessary...that's all.
Out!!!
Ignorance IS NOT BLISS!!!
Tony Bahu
For more information on IRA's, please visit:
www.irasearch.info/ira-s.htm
For you to entrust someone with that kind of money, and for him to have no financial education is a sin. Now, don't get me wrong, some of the agents are VERY well educated. But if you think of the new agent entering the market, they may have little or no experience with investing matters.
This to me is something the insurance industry should rethink. You see, fixed and index annuities (index annunities are glorified fixed annuities for lack of a better explanation at the present) do not have the stipulations that securities have on them. This leaves a lot of room more abuse and I truly think that should be changed.
The insurance industry should, without a doubt, require formal FINANCIAL training for someone who wants to sell annuities. I will say this forever and continue to push for it. Just trying to say that I believe it is necessary...that's all.
Out!!!
Ignorance IS NOT BLISS!!!
Tony Bahu
For more information on IRA's, please visit:
www.irasearch.info/ira-s.htm
Saturday, June 04, 2005
Annuities in IRA's
Yes, this is the second time I am going to write about this topic. It warrants attention because I have seen it in the newspapers over the past several days. If you've read my opinion on this topic, please forgive me.
Butl, I have to tell you that it amazes me much stupidity surrounds the financial industry. Let me explain. I read article after article about people saying that annuities don't belong in IRA's because they are tax deferred vehicles in a tax deferred account. This is a statement that needs clarification.
Anyone who knows annuities knows that there are several benefits to owning an annuity (and some downsides too) and only one of them is the tax deferral aspect. There are safety benefits, beneficiary designation benefits, and benefits other than tax deferral. So it begs the question, 'is an annuity really a bad idea for an IRA?'
My answer is it depends. If someone is only looking for tax deferral and that is the reason he is buying the annuity, then it is obvious that it doesn't belong in an IRA. However, if someone is concerned with the other benefits of the annuity, then maybe it can go in the IRA and be a good idea.
My point is, it is not fair to make a blanket statements such as annuities don't belong in IRA's because it doesn't take into account the full picture. And if anyone knows me by know, you'll know that I am an advocate of designing the investment for the exact situation you're in. I don't believe in the investment theory that one size fits all...or the asset allocation models for that matter...who in the heck ever though of a 10 question interview that could determine where your assets should go...give me a break.
In order to determine what's right for you there are many aspects you and your financial advisor need to look at. I won't go over them because I have mentioned it before. But the bottom line is, if your situation calls for it, you can put an annuity in your IRA. It's as simple as that. Anyway, like I always say:
Ignorance is NOT Bliss.
For more information and strategies on IRA's, please visit:
IRA Search
Butl, I have to tell you that it amazes me much stupidity surrounds the financial industry. Let me explain. I read article after article about people saying that annuities don't belong in IRA's because they are tax deferred vehicles in a tax deferred account. This is a statement that needs clarification.
Anyone who knows annuities knows that there are several benefits to owning an annuity (and some downsides too) and only one of them is the tax deferral aspect. There are safety benefits, beneficiary designation benefits, and benefits other than tax deferral. So it begs the question, 'is an annuity really a bad idea for an IRA?'
My answer is it depends. If someone is only looking for tax deferral and that is the reason he is buying the annuity, then it is obvious that it doesn't belong in an IRA. However, if someone is concerned with the other benefits of the annuity, then maybe it can go in the IRA and be a good idea.
My point is, it is not fair to make a blanket statements such as annuities don't belong in IRA's because it doesn't take into account the full picture. And if anyone knows me by know, you'll know that I am an advocate of designing the investment for the exact situation you're in. I don't believe in the investment theory that one size fits all...or the asset allocation models for that matter...who in the heck ever though of a 10 question interview that could determine where your assets should go...give me a break.
In order to determine what's right for you there are many aspects you and your financial advisor need to look at. I won't go over them because I have mentioned it before. But the bottom line is, if your situation calls for it, you can put an annuity in your IRA. It's as simple as that. Anyway, like I always say:
Ignorance is NOT Bliss.
For more information and strategies on IRA's, please visit:
IRA Search
Wednesday, June 01, 2005
The Other Problem with the Equity Indexed Annuity
Okay, so here is the other problem with the index annuity. Many agents try to sell it as the 'answer to all problems.' The fact of the matter is, it is not that at all. An indexed annuity is designed to have the potential to capture a little more upside than a traditional fixed annuity can.
Again, many agents claim it is a way to beat the markets...they will severely underperform in a good bull market. Furthermore, they are not designed to capture all the upside. They are designed to give a lower floor and a higher ceiling than traditional fixed annuities. They are by no means a stock market alternative.
So the bottom line is that the equity indexed annuity can be something desinged particularly to fit in someone's portfolio. It has advantages that other annuities cannot offer. It gives the protection of a fixed annuity. And it gives a little more upside than traditional safety vehicles.
All in all, it can be a good thing but it depends on an investor's situation. For someone looking for all the upside and who doesn't care about taking risk and losing money, the index annuity is far from the right choice. For someone who has a small risk tolerance but cares to have a little more upside potential, it can be a good choice.
The most important thing is to understand, any investment is part of a bigger equation. That is the bottom line. And furthermore, research is key. It is important to know what you are getting into. The further side of the spectrum is agents saying that EIA's are a scam. Those guys just don't understand how the EIA works.
Ignorance is Not Bliss.
Tony Bahu
CEO
AnnuityMD.com
Again, many agents claim it is a way to beat the markets...they will severely underperform in a good bull market. Furthermore, they are not designed to capture all the upside. They are designed to give a lower floor and a higher ceiling than traditional fixed annuities. They are by no means a stock market alternative.
So the bottom line is that the equity indexed annuity can be something desinged particularly to fit in someone's portfolio. It has advantages that other annuities cannot offer. It gives the protection of a fixed annuity. And it gives a little more upside than traditional safety vehicles.
All in all, it can be a good thing but it depends on an investor's situation. For someone looking for all the upside and who doesn't care about taking risk and losing money, the index annuity is far from the right choice. For someone who has a small risk tolerance but cares to have a little more upside potential, it can be a good choice.
The most important thing is to understand, any investment is part of a bigger equation. That is the bottom line. And furthermore, research is key. It is important to know what you are getting into. The further side of the spectrum is agents saying that EIA's are a scam. Those guys just don't understand how the EIA works.
Ignorance is Not Bliss.
Tony Bahu
CEO
AnnuityMD.com
Sunday, May 29, 2005
The Problem with the Equity Index Annuity
Okay, so here is what I want to cover today...the problem with the equity indexed annuity. What do I mean by problem? Well let me explain.
When we think of the word equity we think of the stock market. And when we think of the stock market, many of us have a bad memory of the severe losses sustained in the recent market decline. Well, the problem is, the equity index annuity is a FIXED annuity. However, the name would have you think otherwise.
Now let me preface this by sating, not all index annuities were created equal. Some of them just flatout suck and end up really nailing the client to the wall. So before you go out and buy one, do your homework. But, here's something you need to know. Although the UPSIDE performance of an indexed annuity is based on some index of the market, it is a FIXED annuity. This means, barring any disasters, IF you hold it the full length of the term, you cannot lose money...in fact, you can only make money. Now, again, don't cofuse this with a variable annuity that invests in an index. I am talking about a fixed equity index annuity.
So to me, one of the biggest problems with the EIA is the name....Who is the idiot that called it that? I get more people asking me about that than any other question. Yes, the name is confusing and somebody should change it.
So you may think this is my personal issue, but I am honest in saying, it is the fact that it is so confusing for clients. The name has one believe that there is stock market risk involved. Now, there is one other huge problem with the index annuity. I am going to share that with you tomorrow. Please stay tune because this is a good one.
By the way, I never tout my product, but I think this time I will. The Shocking Truths Revealed is a book I wrote that really goes into detail about how people get hurt with annuities and how you can avoid these mistakes. IF you haven't seen it, go to http://www.AnnuityMD.com. It is worth checking out. And I wrote a follow up book which can be picked up as an upgrade STRICTLY on the equity index annuity. This is a must if you are thinking about these vehicles. Okay, that plug is over.
Thank you and remember,
Ignorance is NOT Bliss.
P.S. Here are a couple of more resources. I like to share them with you and I hope you don't mind:
Mortgage
Jewelry
Dimaonds
When we think of the word equity we think of the stock market. And when we think of the stock market, many of us have a bad memory of the severe losses sustained in the recent market decline. Well, the problem is, the equity index annuity is a FIXED annuity. However, the name would have you think otherwise.
Now let me preface this by sating, not all index annuities were created equal. Some of them just flatout suck and end up really nailing the client to the wall. So before you go out and buy one, do your homework. But, here's something you need to know. Although the UPSIDE performance of an indexed annuity is based on some index of the market, it is a FIXED annuity. This means, barring any disasters, IF you hold it the full length of the term, you cannot lose money...in fact, you can only make money. Now, again, don't cofuse this with a variable annuity that invests in an index. I am talking about a fixed equity index annuity.
So to me, one of the biggest problems with the EIA is the name....Who is the idiot that called it that? I get more people asking me about that than any other question. Yes, the name is confusing and somebody should change it.
So you may think this is my personal issue, but I am honest in saying, it is the fact that it is so confusing for clients. The name has one believe that there is stock market risk involved. Now, there is one other huge problem with the index annuity. I am going to share that with you tomorrow. Please stay tune because this is a good one.
By the way, I never tout my product, but I think this time I will. The Shocking Truths Revealed is a book I wrote that really goes into detail about how people get hurt with annuities and how you can avoid these mistakes. IF you haven't seen it, go to http://www.AnnuityMD.com. It is worth checking out. And I wrote a follow up book which can be picked up as an upgrade STRICTLY on the equity index annuity. This is a must if you are thinking about these vehicles. Okay, that plug is over.
Thank you and remember,
Ignorance is NOT Bliss.
P.S. Here are a couple of more resources. I like to share them with you and I hope you don't mind:
Mortgage
Jewelry
Dimaonds
Wednesday, May 25, 2005
Stock Market Resources
Here are some stock trading resources also that some of you have requested:
http://www.stockmarketmd.com/stockmarketdaytrading/
and
http://www.stockmarketmd.net/stock-trading-investing.htm
http://www.stockmarketmd.com/stockmarketdaytrading/
and
http://www.stockmarketmd.net/stock-trading-investing.htm
Foreclosure Resources
Here are a couple of resources some of you asked me for regarding real estate foreclosures:
http://nomoneynocredit.com/foreclosure-information.htm
http://www.realestatemd.biz/bankrepos.htm
Yes, it's not annuity info but some people have requested this so here they are.
Out!!!
http://nomoneynocredit.com/foreclosure-information.htm
http://www.realestatemd.biz/bankrepos.htm
Yes, it's not annuity info but some people have requested this so here they are.
Out!!!
Living Benefit and Variable Annuities
Okay, so I was talking about the living benefit. I told you my position is that it can be very confusing. Incidentally, I got a call from an agent yesterday who was truly genuine and concerned to always do the right thing for his clients.
We got into a conversation about the living benefit. He told me of an annuity that would offer 12.5% return over a 20 year guarantee period. Now, this sounds wonderful, right? And a little too good to be true, right? On the surface, it looks like the client gets 12.5% per year if the market does not do well over a 20 year period. But here is how it really works. The guarantee is 12.5% of the amount you invest each year for 20 years. So if you put in $100K, you would be guaranteed $12,500 the first year and increases $12,500 per year until year 20 where your principal would be worth $250,000 in this case.
So the bottom line is that if the market didn't perform you would be guaranteed 250% of your original principal at the end of 20 years. Now pay attention. Here is how to see if the living benefit is worth paying for. First of all, the rate of return annualized for this type of return is around 4.68%. So let's initially compare that with any other 20 year rate of return...Hmmm....I think I could get 4.68% anywhere for 20 years on my money (probably for less time that that too). Furthermore, the chances of the market returning less than 4.68% over 20 years is slim to none. In the worst 20 year period, the S&P returned an annual average of 6.43% (according to http://www.mutualofamerica.com/articles/CapMan/October03/SandP500.htm.)
So logically, if you pay extra for this feature, it proboably doesn't make sense. Now seriously, there's always exceptions to the rule because anything can happen in the stock market. But if this feature cost you .50% and the annuity cost you 2.50% you now have 3% in expenses. And chances are you will never need nor use it so you have mitigated your returns and paid an extra $500 or more per year for 20 years in this case (hey $10,000 is a lot of money).
Living benefits are tricky and weighted heavily to favor the insurance company...not the client. Before you pay for a living benefit, analyze it in this way to see if it makes sense. Again, I am not against them completely, I just think you better understand them.
Ignorance is Not Bliss!!!
By the way, some of you have asked me for resources regarding the stock market. Here are two such resources:
Stock Market Basics
and
Stock Market Directory
Out!!!
We got into a conversation about the living benefit. He told me of an annuity that would offer 12.5% return over a 20 year guarantee period. Now, this sounds wonderful, right? And a little too good to be true, right? On the surface, it looks like the client gets 12.5% per year if the market does not do well over a 20 year period. But here is how it really works. The guarantee is 12.5% of the amount you invest each year for 20 years. So if you put in $100K, you would be guaranteed $12,500 the first year and increases $12,500 per year until year 20 where your principal would be worth $250,000 in this case.
So the bottom line is that if the market didn't perform you would be guaranteed 250% of your original principal at the end of 20 years. Now pay attention. Here is how to see if the living benefit is worth paying for. First of all, the rate of return annualized for this type of return is around 4.68%. So let's initially compare that with any other 20 year rate of return...Hmmm....I think I could get 4.68% anywhere for 20 years on my money (probably for less time that that too). Furthermore, the chances of the market returning less than 4.68% over 20 years is slim to none. In the worst 20 year period, the S&P returned an annual average of 6.43% (according to http://www.mutualofamerica.com/articles/CapMan/October03/SandP500.htm.)
So logically, if you pay extra for this feature, it proboably doesn't make sense. Now seriously, there's always exceptions to the rule because anything can happen in the stock market. But if this feature cost you .50% and the annuity cost you 2.50% you now have 3% in expenses. And chances are you will never need nor use it so you have mitigated your returns and paid an extra $500 or more per year for 20 years in this case (hey $10,000 is a lot of money).
Living benefits are tricky and weighted heavily to favor the insurance company...not the client. Before you pay for a living benefit, analyze it in this way to see if it makes sense. Again, I am not against them completely, I just think you better understand them.
Ignorance is Not Bliss!!!
By the way, some of you have asked me for resources regarding the stock market. Here are two such resources:
Stock Market Basics
and
Stock Market Directory
Out!!!
Monday, May 23, 2005
Speaking of Variable Annuities
Here's an article where I was quoted. I would like to clarify what I meant here. Please read this first. It comes from Ignites.com:
Retirement Needs Spur New VA Products Article published on May 20, 2005 By Alison Sahoo
-->A growing number of variable annuity providers are introducing products and programs to help soon-to-retire baby boomers convert investments into income that will replace wage earnings.
New offerings include VAs with guaranteed minimum withdrawal benefits (GMWBs) for life and VAs marketed to holders of individual retirement accounts (IRAs).
Earlier this month, John Hancock enhanced its Principal Plus GMWB option for its Venture family of variable annuities, raising the guarantee period from five years to effectively cover older contract holders’ entire lifetime.
GMWBs protect investors against market volatility by allowing them to make systematic withdrawals from a protected value for a certain period of time.
Hancock’s move, says Manulife Wood Logan president Robert Cassato, was designed to expand upon the product’s strong sales momentum. Manulife Wood Logan provides sales and marketing support for John Hancock’s investment products.
Principal Plus was introduced in late 2003. In 2004, says Cassato, sales jumped 47% from the prior year and the rider was included in 50% of total sales. Now, the rider is included in about 80% of new sales.
The new lifetime benefit allows clients to withdraw up to 5% of their initial payment each year for 20 years regardless of market performance. It also guarantees payments for the life of contract owners who are 65 or older.
That gives retirees a steady stream of income and is especially important, Cassato notes, since less than 1% of all contract holders now convert their VAs into payment streams through annuitization.
The vast majority, he says, never realize the products’ intended benefit of receiving regular payments from their investment because they’re afraid that by annuitizing, they’ll give up their ability to access their full holdings should they need them.
“We’re so excited about this,” he says. “This comes at a time when baby boomers are looking to convert their nest egg into a pension and makes VAs the product of choice for the retiring generation.”
Principal Plus is priced at 30 basis points and the new Principal Plus for Life costs 40 basis points. Cassato says he expects most new business to shift to the enhanced option.
GMWBs were pioneered by Hartford in mid-2002, when the company launched its Principal First benefit. The rider allows contract holders to withdraw 7% of their investment principal each year until it’s exhausted. That usually takes 10 or 12 years and investors pay 50 basis points each year for it.
Last year, Hartford expanded its offering with Principal First Preferred. It allows investors to withdraw 5% each year, so payments are spread over a longer period of time. It costs 20 basis points.
Neither, however, guarantees payouts for the life of the contract holder.
Hartford vice president for annuity product development Rob Arena says that the company is focused on designing investment and income products to help retirees both accumulate assets and generate an income stream that will last their lifetime.
“With our variable annuity products, we are helping investors meet these needs by offering a broad range of asset allocation solutions to address their changing investment objectives and living benefits such as GMWBs for retirement income planning,” he says.
The company recently expanded its Director M variable annuity, adding six new investment managers and three new mutual funds.
Despite the growing popularity of GMWBs, however, some say that consumers should still be cautious because the products are complicated.
“The problem is the way that brokers and agents describe the guarantee,” says Tony Bahu, CEO of AnnuityMd.com and author of Annuities: The Shocking Truths Revealed. “Most of the time, the agent doesn’t explain it properly, so people aren’t aware of how they work. Investors should also do their own homework.”
Other VA providers are focusing on encouraging investors to use their products as an investment vehicle for their retirement accounts.
MassMutual, for example, has just launched a new campaign to help financial pros pitch VAs for retirement account rollovers.
Although the ability to defer income tax on gains from VAs duplicates that feature of qualified retirement plans, VAs offer some other benefits that can be very attractive.
Those include income benefits like the GMWB and death benefits that will protect the value of VAs from market declines for contract holders’ heirs. When the customer dies, heirs can receive the higher of the original principal paid in or the contract value on its highest anniversary, depending upon the option selected.
A spokesman for MassMutual could not provide further detail by press time.
According to the National Association for Variable Annuities (NAVA), net flows into VAs were $8.2 billion in the fourth quarter of last year, a 37.9% decrease from a year ago. That includes customer withdrawals and transfers. At the end of the quarter, there was $1.1 trillion in assets held in VAs. This represents a 7.2% drop from the end of 2003.
_______________________________End of Article
Yes, these living benefits are very tricky, and sometimes deceiving. I also believe they are explained so poorly by agents and the industry and that is what makes them so deceiving. Once again, I am not inherently against them (nor for them) but because I have seen so many people get burned by them, I am very leary.
Let me explain. Many people are never told that if the 'iving benefit' comes into play, in most annuities, there are strings attached. This means that there are limitations over how you can take your money. With that said, it comes back to haunt the client later.
Furthermore, the living benefit has a price to it. Factor that in with the cost of variable annuities, and you have yourself one expensive investment vehicle. If the market averages 9% over time and your expenses are over 3% and your living benefit guarantees you 6% return, do you see where that becomes a problem?
There is much more to it but I will get into it in the near future in more detail. Thanks for listenting.
For more information, visit:
http://www.AnnuityMD.com
Out!!!
Retirement Needs Spur New VA Products Article published on May 20, 2005 By Alison Sahoo
-->A growing number of variable annuity providers are introducing products and programs to help soon-to-retire baby boomers convert investments into income that will replace wage earnings.
New offerings include VAs with guaranteed minimum withdrawal benefits (GMWBs) for life and VAs marketed to holders of individual retirement accounts (IRAs).
Earlier this month, John Hancock enhanced its Principal Plus GMWB option for its Venture family of variable annuities, raising the guarantee period from five years to effectively cover older contract holders’ entire lifetime.
GMWBs protect investors against market volatility by allowing them to make systematic withdrawals from a protected value for a certain period of time.
Hancock’s move, says Manulife Wood Logan president Robert Cassato, was designed to expand upon the product’s strong sales momentum. Manulife Wood Logan provides sales and marketing support for John Hancock’s investment products.
Principal Plus was introduced in late 2003. In 2004, says Cassato, sales jumped 47% from the prior year and the rider was included in 50% of total sales. Now, the rider is included in about 80% of new sales.
The new lifetime benefit allows clients to withdraw up to 5% of their initial payment each year for 20 years regardless of market performance. It also guarantees payments for the life of contract owners who are 65 or older.
That gives retirees a steady stream of income and is especially important, Cassato notes, since less than 1% of all contract holders now convert their VAs into payment streams through annuitization.
The vast majority, he says, never realize the products’ intended benefit of receiving regular payments from their investment because they’re afraid that by annuitizing, they’ll give up their ability to access their full holdings should they need them.
“We’re so excited about this,” he says. “This comes at a time when baby boomers are looking to convert their nest egg into a pension and makes VAs the product of choice for the retiring generation.”
Principal Plus is priced at 30 basis points and the new Principal Plus for Life costs 40 basis points. Cassato says he expects most new business to shift to the enhanced option.
GMWBs were pioneered by Hartford in mid-2002, when the company launched its Principal First benefit. The rider allows contract holders to withdraw 7% of their investment principal each year until it’s exhausted. That usually takes 10 or 12 years and investors pay 50 basis points each year for it.
Last year, Hartford expanded its offering with Principal First Preferred. It allows investors to withdraw 5% each year, so payments are spread over a longer period of time. It costs 20 basis points.
Neither, however, guarantees payouts for the life of the contract holder.
Hartford vice president for annuity product development Rob Arena says that the company is focused on designing investment and income products to help retirees both accumulate assets and generate an income stream that will last their lifetime.
“With our variable annuity products, we are helping investors meet these needs by offering a broad range of asset allocation solutions to address their changing investment objectives and living benefits such as GMWBs for retirement income planning,” he says.
The company recently expanded its Director M variable annuity, adding six new investment managers and three new mutual funds.
Despite the growing popularity of GMWBs, however, some say that consumers should still be cautious because the products are complicated.
“The problem is the way that brokers and agents describe the guarantee,” says Tony Bahu, CEO of AnnuityMd.com and author of Annuities: The Shocking Truths Revealed. “Most of the time, the agent doesn’t explain it properly, so people aren’t aware of how they work. Investors should also do their own homework.”
Other VA providers are focusing on encouraging investors to use their products as an investment vehicle for their retirement accounts.
MassMutual, for example, has just launched a new campaign to help financial pros pitch VAs for retirement account rollovers.
Although the ability to defer income tax on gains from VAs duplicates that feature of qualified retirement plans, VAs offer some other benefits that can be very attractive.
Those include income benefits like the GMWB and death benefits that will protect the value of VAs from market declines for contract holders’ heirs. When the customer dies, heirs can receive the higher of the original principal paid in or the contract value on its highest anniversary, depending upon the option selected.
A spokesman for MassMutual could not provide further detail by press time.
According to the National Association for Variable Annuities (NAVA), net flows into VAs were $8.2 billion in the fourth quarter of last year, a 37.9% decrease from a year ago. That includes customer withdrawals and transfers. At the end of the quarter, there was $1.1 trillion in assets held in VAs. This represents a 7.2% drop from the end of 2003.
_______________________________End of Article
Yes, these living benefits are very tricky, and sometimes deceiving. I also believe they are explained so poorly by agents and the industry and that is what makes them so deceiving. Once again, I am not inherently against them (nor for them) but because I have seen so many people get burned by them, I am very leary.
Let me explain. Many people are never told that if the 'iving benefit' comes into play, in most annuities, there are strings attached. This means that there are limitations over how you can take your money. With that said, it comes back to haunt the client later.
Furthermore, the living benefit has a price to it. Factor that in with the cost of variable annuities, and you have yourself one expensive investment vehicle. If the market averages 9% over time and your expenses are over 3% and your living benefit guarantees you 6% return, do you see where that becomes a problem?
There is much more to it but I will get into it in the near future in more detail. Thanks for listenting.
For more information, visit:
http://www.AnnuityMD.com
Out!!!
Tuesday, May 17, 2005
Variable Annuities and Surrender Charges
Please consult with a professional before applying these strategies.
There are many of our subscribers who are involved with variable annuities. One of the biggest challenges with the variable annuity is once you've suffered large losses in the annuity. Why is that an issue? Because, variable annuities have a 'life insurance' policy built in. For example, if you put in $500,000 and over time due to market losses, your variable annuity is only worth $350,000, your death benefit is still the original $500,000. So if you surrender the annuity policy, you may alos surrender your $500,000 death benefit. That is a hard pill to swallow.
Well, what the insurance companies won't tell you is that there are different ways to 'wind down' your annuity without losing all of the benefits. In a variable annuity, there are different ways to calculate your surrender charges. It boils down to what is called dollar for dollar withdrawal versus pro-rata withdrawals. All this means is that, in dollar-for-dollar withdrawal, when you take money out, your death benefit gets reduced by $1 for every $1 you withdraw...where as in pro-rata, if you take out 70% of the money, it reduces the death benefit by 70%.
Now get this...if you have an annuity worth $350,00 with a death benefit of $500,000, and you have dollar-for-dollar withdrawal, then guess what? IF you withdraw $300,000 then you may still have a death benefit of $200,000. This works provided that you keep the annuity in-tact in this example. Therefore, you still have an annuity worth $50,000 with a death benefit of $200,000 and $300,000 (less surrender charges). Now, this is completely unadvertised by the insurance companies.
Furthermore, often times in SOME annuities, the surrender charge sometimes has a twist. For example, if you want to withdraw your entire amount, often times the surrender charge is assessed on the original invested amount. However, if you want to withdraw a portion, the surrender charge is assessed only on the withdrawal amount.
So here's the situation. IF you were in the predicament as mentioned above ($350,000 annuity with $500,000 surrender charge), you may look at this. IF it has dollar for dollar withdrawal, you can withdraw $300,000. If the surrender charge is 3%, instead of getting hit with a 3% charge on the $500,000 and losing your entire death benefit, you would get a 3% surrender charge on $300,000 and keep a $200,000 death benefit. In this situation, you would have saved $6,000 in surrender charges and you now have a $200,000 death benefit fully paid for for the rest of your life.
Now if you are starting to get this, you can see the value of it. Remember, this doesn't work for all variable annutiies, and ou should definintely consult with a professional before making these types of decisions, but I just wanted to let you know that there is a better way.
For more information, please visit:
http://www.AnnuityHome.net/annuities-variable.htm
There are many of our subscribers who are involved with variable annuities. One of the biggest challenges with the variable annuity is once you've suffered large losses in the annuity. Why is that an issue? Because, variable annuities have a 'life insurance' policy built in. For example, if you put in $500,000 and over time due to market losses, your variable annuity is only worth $350,000, your death benefit is still the original $500,000. So if you surrender the annuity policy, you may alos surrender your $500,000 death benefit. That is a hard pill to swallow.
Well, what the insurance companies won't tell you is that there are different ways to 'wind down' your annuity without losing all of the benefits. In a variable annuity, there are different ways to calculate your surrender charges. It boils down to what is called dollar for dollar withdrawal versus pro-rata withdrawals. All this means is that, in dollar-for-dollar withdrawal, when you take money out, your death benefit gets reduced by $1 for every $1 you withdraw...where as in pro-rata, if you take out 70% of the money, it reduces the death benefit by 70%.
Now get this...if you have an annuity worth $350,00 with a death benefit of $500,000, and you have dollar-for-dollar withdrawal, then guess what? IF you withdraw $300,000 then you may still have a death benefit of $200,000. This works provided that you keep the annuity in-tact in this example. Therefore, you still have an annuity worth $50,000 with a death benefit of $200,000 and $300,000 (less surrender charges). Now, this is completely unadvertised by the insurance companies.
Furthermore, often times in SOME annuities, the surrender charge sometimes has a twist. For example, if you want to withdraw your entire amount, often times the surrender charge is assessed on the original invested amount. However, if you want to withdraw a portion, the surrender charge is assessed only on the withdrawal amount.
So here's the situation. IF you were in the predicament as mentioned above ($350,000 annuity with $500,000 surrender charge), you may look at this. IF it has dollar for dollar withdrawal, you can withdraw $300,000. If the surrender charge is 3%, instead of getting hit with a 3% charge on the $500,000 and losing your entire death benefit, you would get a 3% surrender charge on $300,000 and keep a $200,000 death benefit. In this situation, you would have saved $6,000 in surrender charges and you now have a $200,000 death benefit fully paid for for the rest of your life.
Now if you are starting to get this, you can see the value of it. Remember, this doesn't work for all variable annutiies, and ou should definintely consult with a professional before making these types of decisions, but I just wanted to let you know that there is a better way.
For more information, please visit:
http://www.AnnuityHome.net/annuities-variable.htm
Sunday, May 15, 2005
Equity Index Annuities Continued
This is a continutation of commenting on the article from 4/25/05. All credits to the article are given there. The actual article is in black and my comments are in red.
Index Averaging
Some EIAs average an index's value either daily or monthly rather than use the actual value of the index on a specified date. Averaging may reduce the amount of index-linked interest you earn.
While averaging CAN reduce the amount you earn, averaging can also smooth out the ride. What averaging does is instead of measuring a starting and a finishing point, the insurance company takes the beginning value of the index on a specified date. Then depending on whether it is daily or monthly averaging, they average the value of the market based on the specific period. Then, they subtract the average value from the starting value.
The point is, yes, you are taking an average so if the market went straight up, the average would be lower than the final point. That is, if you take the average of 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 with 10 being the finishing point, the average is obviously lower than 10. However, the market went straigh up and stayed high, only to go below it's starting point after 1 year, point-to-point would give you no return where averaging would have a better chance in this situation.
Each has its benefits and like anything else, it may pay to diversify strategies.
Interest Calculation.
The way that an insurance company calculates interest earned during the term of an EIA can make a big difference in the amount of money you will earn. Some EIAs pay simple interest during the term of the annuity. Because there is no compounding of interest, your return will be lower.
Although this is true, check with your annuity. Most EIA's pay compounding interest. Particulary EIA's that have annual reset, which in my opinion is a MUST. Again, that is only my opinion. Your situation may vary and you should seek the help of a professional to determine what is right for you.
Exclusion of Dividends.
Most EIAs only count equity index gains from market price changes, excluding any gains from dividends. Since you're not earning dividends, you won't earn as much as if you invested directly in the market.
But you also can't lose money due to market risk like you can in the market. However, the fact that it doesn't pay dividends warrants attention. Dividends account for a good portion of the gains in the market so you should be aware of this.
Can I get my money when I need it?
EIAs are long-term investments. Getting out early may mean taking a loss. Many EIAs have surrender charges. The surrender charge can be a percentage of the amount withdrawn or a reduction in the interest rate credited to the EIA.Also, any withdrawals from tax-deferred annuities before you reach the age of 59½ are generally subject to a 10% tax penalty in addition to any gain being taxed as ordinary income.
Very good points. Always remember that annuities require time to be worth it. They can offer you more than a traditional CD can because you are offering them time on your money and that is the tradeoff.
Ignorance is not Bliss.
For more information and resources on annuities, go to:
http://www.AnnuityHome.com
http://www.MyAnnuitySite.com/annuities101/
Index Averaging
Some EIAs average an index's value either daily or monthly rather than use the actual value of the index on a specified date. Averaging may reduce the amount of index-linked interest you earn.
While averaging CAN reduce the amount you earn, averaging can also smooth out the ride. What averaging does is instead of measuring a starting and a finishing point, the insurance company takes the beginning value of the index on a specified date. Then depending on whether it is daily or monthly averaging, they average the value of the market based on the specific period. Then, they subtract the average value from the starting value.
The point is, yes, you are taking an average so if the market went straight up, the average would be lower than the final point. That is, if you take the average of 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 with 10 being the finishing point, the average is obviously lower than 10. However, the market went straigh up and stayed high, only to go below it's starting point after 1 year, point-to-point would give you no return where averaging would have a better chance in this situation.
Each has its benefits and like anything else, it may pay to diversify strategies.
Interest Calculation.
The way that an insurance company calculates interest earned during the term of an EIA can make a big difference in the amount of money you will earn. Some EIAs pay simple interest during the term of the annuity. Because there is no compounding of interest, your return will be lower.
Although this is true, check with your annuity. Most EIA's pay compounding interest. Particulary EIA's that have annual reset, which in my opinion is a MUST. Again, that is only my opinion. Your situation may vary and you should seek the help of a professional to determine what is right for you.
Exclusion of Dividends.
Most EIAs only count equity index gains from market price changes, excluding any gains from dividends. Since you're not earning dividends, you won't earn as much as if you invested directly in the market.
But you also can't lose money due to market risk like you can in the market. However, the fact that it doesn't pay dividends warrants attention. Dividends account for a good portion of the gains in the market so you should be aware of this.
Can I get my money when I need it?
EIAs are long-term investments. Getting out early may mean taking a loss. Many EIAs have surrender charges. The surrender charge can be a percentage of the amount withdrawn or a reduction in the interest rate credited to the EIA.Also, any withdrawals from tax-deferred annuities before you reach the age of 59½ are generally subject to a 10% tax penalty in addition to any gain being taxed as ordinary income.
Very good points. Always remember that annuities require time to be worth it. They can offer you more than a traditional CD can because you are offering them time on your money and that is the tradeoff.
Ignorance is not Bliss.
For more information and resources on annuities, go to:
http://www.AnnuityHome.com
http://www.MyAnnuitySite.com/annuities101/
Thursday, May 12, 2005
Mortgage Resources
Here is a resource for mortgage information. You can get to it by clicking on the title of this blog or you can click below.
Mortgage Resources
Mortgage Resources
Insurance Resources
Life Insurance, Disability Insurance, Long Term Care Insurance, and Health Insurance.
Good insurance is hard to find. There are many different resources to find insurance but how do you know where to go for it? Well, there is a resource that has many different links and articles all in one place. I see disability, health, long-term care, and life insurance on the site. Take a look at it and see if it will help you. For the main site, just click on the title. OTherwise, here are some of the other resources of the site.
Disability Insurance
Health Insurance
Long Term Care Insurance
Life Insurance
Good insurance is hard to find. There are many different resources to find insurance but how do you know where to go for it? Well, there is a resource that has many different links and articles all in one place. I see disability, health, long-term care, and life insurance on the site. Take a look at it and see if it will help you. For the main site, just click on the title. OTherwise, here are some of the other resources of the site.
Disability Insurance
Health Insurance
Long Term Care Insurance
Life Insurance
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