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Buying an annuity can be costly, but there are situations where choosing them is a good idea.
It’s Monday, folks. Time to snap back to reality!
The odds in favor of longevity are improving. Here are three steps to ensure you will have enough money to live the good life for a long time.
Retirees want three things from their retirement income: A very low risk of outliving their money. Predictable, consistent availability of income. Enough liquidity that they feel flexible enough to pay for emergencies — or splurges. But as the Rolling Stones sang, “You can’t always get what you want. But if you try sometimes, well, you
How do you achieve retirement security in a time of uncertainty? It feels hard to do even rudimentary retirement planning when you don’t know how much money you’ll have to work with or how much it will take to continue to live comfortably when you’re not working.
Doug Carey, owner and principal of the retirement planning firm WealthTrace, published a piece this morning on SeekingAlpha.com that analyzed a 50-year-old couple’s financial situation. He concluded that if they put half their $500,000 retirement savings in equities and half in short-term Treasury bonds, by age 60, when they hope to retire, the money will have grown to $665,000, given a realistic 6 percent return on equities and 2 percent return on Treasuries.
Retirement planning isn’t easy. Don’t assume. Assuming without doing the math is a big mistake.
Here are some retirement assumptions that may be true but are just as likely — based on your numbers — to be wrong.
A Roth IRA or 401(k) will save you money in the end. Before you switch or convert your current account, do the math. For young people with their highest-earning years ahead of them, choosing a Roth individual retirement account, or IRA, will almost certainly pay off. But if you are currently in your highest-earning years, skipping the tax break now is likely to turn out to be a costly mistake. Get your accountant to make some projections before you make up your mind.
On Wednesday, the Hartford announced it would be exiting the annuity and life insurance business. According to the press release, the company will stop new annuity sales April 27.
In order to divest the company of the annuity arm, the company is placing the annuity business into runoff. That means the company will allow the existing annuities to be drawn down until they are depleted.
“As part of the runoff strategy, The Hartford will continue to pursue actions to reduce the risks associated with the legacy annuity blocks, and to improve capital efficiency,” the press release stated.
According to the Insured Retirement Institute, or IRI, the Hartford represented 0.6 percent of all variable annuity sales in 2011.
Retirement planning is particularly difficult for people who don’t have an employer-sponsored retirement plan. California State Sen. Kevin De Leon, D-Los Angeles, is offering an innovative plan that will help solve that problem — starting in his home state, a place where trends often start. De Leon proposes to set up a voluntary and portable
Last week, the U.S. Treasury Department proposed changing Internal Revenue Service rules to make it easier for people saving for retirement — or actually living in retirement — to use some of the money in their 401(k)s to buy annuities that guarantee monthly payments until they die. These changes are a real retirement-planning boon. Here
In a recent blog post about retiring abroad, I stated that I didn’t want to live in Costa Rica because an American student disappeared in a national park near Liberia in August 2009, according to Carole Moore’s compelling book, “The Last Place You’d Look: True Stories of Missing Persons and the People Who Search for
