Annuity Investing for Retirement, Part 1
Table of Contents
Chapter 1: Retirement’s Surprise |
1 |
|
|
Finding Retirement Income |
1 |
|
Everyone is Living Longer These Days |
5 |
|
Retirement Risks |
6 |
|
Baby-Boom Generation Reaches Retirement |
8 |
|
Putting Off Retirement |
10 |
|
Gender Issues in Retirement |
10 |
|
Interest, Dividends and Rental Income |
14 |
|
Supplementing SS with Lifetime Annuities |
14 |
|
Retirement is Expensive |
17 |
|
How Much Money is Needed to Fund Retirement? |
21 |
|
Limiting Credit Card Use in Retirement |
23 |
|
Mortgage Debt |
25 |
|
Paying Loans for Others |
25 |
|
Social Security’s Development |
27 |
|
Changing the Age of Retirement |
37 |
|
Choosing a Financial Path |
38 |
|
Taxation Affects Retirement |
38 |
|
Tax Efficiency |
40 |
|
After Longevity, Health is a Major Retirement Concern |
40 |
|
The Disappearing Three-legged Stool |
41 |
|
Diversification |
42 |
|
Rule of 100 |
47 |
|
Managing the Retirement Money |
47 |
|
Supplementing Other Retirement Income |
50 |
|
Annuity Purchase Advantages |
50 |
|
Annuity Purchase is not Right for Everyone |
51 |
|
Investing Dedication is a Rare Quality |
52 |
Chapter 2: Annuity Types |
54 |
|
|
An Ancient Instrument |
54 |
|
The Annuity’s Investment Role |
55 |
|
Capital Reserve Requirements of Insurers |
56 |
|
Structured Settlements |
57 |
|
Annuity Extras |
59 |
|
Options |
59 |
|
Principal Protection |
59 |
|
Annuity Cost-of-Living Protection Option |
59 |
|
Premium Methods |
60 |
|
Annuity Choices / Joint and Survivorship |
60 |
|
Guaranteed and Life-Time-Certain Annuities |
61 |
|
Level Annuities |
61 |
|
Capital-Back Guaranteed Annuities / Escalating & Inflation Annuities |
62 |
|
Enhanced Annuities |
63 |
|
The Roth and Education IRA |
65 |
|
Roth IRA / the Coverdell IRA |
65 |
|
Tax-Deferred Accumulation / Flexibility |
67 |
|
Annuity History |
67 |
|
Annuity Basics |
71 |
|
Choosing Between Fixed and Variable Annuities |
71 |
|
Choosing Between a Lifetime Annuity and Term Annuity |
72 |
|
Determining Investment Type |
73 |
|
Annuity Participants / “Measuring Life” |
74 |
|
Annuity Terminology |
75 |
|
Annuity Contracts are “Driven” |
79 |
|
Meeting Investment Goals |
80 |
|
How to Sue an Annuity for Losses by Kay Miranda |
82 |
|
Annuity Investment Advantages |
83 |
|
Safety of Principal |
84 |
|
Reserve Pools |
87 |
|
Tax-Deferred Growth |
91 |
|
Tax-Deferred Defined |
92 |
|
Tax-Deferred Status |
93 |
|
Tax-Deferral Exception / Annuity Gifts |
94 |
|
Annuities are (Sometimes) Protected Assets |
95 |
|
Probate / Sometimes an Annuity is a Bad Idea |
97 |
|
Surrender Penalties |
98 |
|
Other Tax Issues |
98 |
|
Death of the Annuitant |
99 |
|
1035 Exchanges |
100 |
|
Making the Right Annuity Choices |
100 |
|
So Many Choices |
101 |
|
Immediate Annuities |
103 |
|
Split Annuities / Single Premium Annuities |
104 |
|
Flexible Premium Annuities / Policy owner Risk |
105 |
|
Variable Annuities |
106 |
|
Fixed Annuities |
110 |
|
Declared Rate Fixed Annuities / Indexed Fixed Annuities |
110 |
|
Two-Tiered Annuities: Tier 1 and Tier 2 |
111 |
|
Investment Risk |
112 |
|
Old Money-New Money |
113 |
|
Interest Rates |
115 |
|
Price Inflation |
120 |
|
Measures of Inflation |
122 |
|
Time Value of Money (TVM) / Issue Age Guidelines |
122 |
|
Annuity Date |
123 |
|
Withdrawal and Surrender Charges and Waivers |
124 |
|
Chart / “policy term” |
125 |
|
Premium Payments |
126 |
|
Contract Administration Charges and Fees |
127 |
|
ERISA and Tax-Favored Retirement Plans |
128 |
|
Using Annuities in Tax-Favored Retirement Plans |
128 |
|
Group and Individual Annuity Contracts |
129 |
|
IRS Requirements for Annuity Funding |
129 |
|
Taxation of Qualified Annuity Distributions |
129 |
Chapter 3: Fixed Rate Annuities |
131 |
|
|
Annuity Bailout Options |
133 |
|
Example |
134 |
|
Guaranteed Rates of Return |
136 |
|
1. What is the Guaranteed or Roll-Up Rate? |
139 |
|
2. How Long is Roll-Up Rate Guarantee Period? |
140 |
|
3. What is the Actuarial Payout? |
140 |
|
4. What Fees will be Charged? |
140 |
|
5. What are the Insurance Company Ratings? |
141 |
|
Fixed & Variable Options |
141 |
|
Financial Strength of the Insurer |
142 |
|
How Fixed Period Annuities Work |
142 |
Chapter 4: Equity Indexed Annuities (EIA) |
144 |
|
|
Researching the Products |
145 |
|
Defining the Equity Indexed Annuity |
147 |
|
EIA Guaranteed Rates of Return |
153 |
|
Know the Facts Prior to Buying |
155 |
|
Index Crediting |
156 |
|
Participation Rates |
157 |
|
Averaging |
158 |
|
Caps |
159 |
|
Spreads, Margins, and Administrative Fees / Returns |
159 |
|
Indexing Formulas |
161 |
|
Annual Reset Indexing Method |
162 |
|
High Water Mark Indexing Method |
162 |
|
Point-to-Point Indexing Method |
163 |
|
Multiple EIAs with Diversified Indexing Methods |
164 |
|
Withdrawing Annuity Funds |
165 |
|
Payout Options |
165 |
|
Example |
166 |
|
EIA Safety |
167 |
|
A Comprehensive Financial Plan |
167 |
|
Example |
168 |
|
Grasping Fundamental Aspects of the Product |
171 |
|
Terminology for a Complex Product |
173 |
|
General Contract Provisions |
176 |
|
Entire Contract |
177 |
|
Changes and/or Waivers / Misstatements |
177 |
|
Required Reporting / State Law / Claims of Creditors |
178 |
|
Other Contract Items |
179 |
|
Additional Payments |
179 |
|
Surrender Values and Penalties / New Developments in Indexed Products |
180 |
Chapter 5: Variable Annuities |
182 |
|
|
Variable Annuity Death Benefit |
182 |
|
Subaccounts / Immediate or Deferred / Long-Term Investments |
184 |
|
Annual Expenses |
185 |
|
Variable Annuity Buyback Offers |
186 |
|
Funding Variable Annuities |
189 |
|
Variable Annuity Fees / Surrender Fees / Early Withdrawal Tax Penalty / Taxation |
190 |
|
The Commitment |
191 |
|
Asset Allocation |
192 |
|
Asset Allocation Importance |
193 |
|
Choosing Asset Allocation |
194 |
|
Analyzing the Asset Allocation Model / Risk & Return / Defining Risk |
195 |
|
Business Risk / Market Risk / Interest-Rate risk / Inflation Risk |
196 |
|
Protection Against Inflation |
197 |
|
Measuring All the Risks |
198 |
|
Lifecycle Beta |
199 |
|
Living with Risk and Return |
200 |
|
Managing Sub-Account Strategies |
200 |
|
Relationship Between Variable Accounts |
201 |
|
Sub-Account Options |
201 |
|
Performance |
202 |
|
Risk Control / Expense Minimization / Investment Options |
203 |
|
Family Rating / Management |
204 |
|
Aggressive Growth for Capital Appreciation |
204 |
|
Aggressive Growth for Maximum Growth |
205 |
|
Growth Sub-Accounts Seeking Capital Appreciation |
205 |
|
Growth & Income Sub-Accounts Combining Stock and Bonds |
206 |
|
International Stocks |
207 |
|
Balanced Sub-Accounts Combining Stock & Bonds |
208 |
|
Corporate Bond Sub-Accounts Fixed Income |
209 |
|
Government Bond Sub-Accounts Fixed Income |
211 |
|
High Yield Bond Sub-Accounts Fixed Income |
212 |
|
Global & International Bond Sub-Accounts Fixed Income |
213 |
|
Specialty Portfolios |
215 |
|
Metals Sub-Accounts Specialty Portfolios |
216 |
|
Utility Stock Sub-Accounts Specialty Portfolios |
217 |
|
1997 Tax Law Hits Variable Annuities / Reallocation of Assets |
218 |
|
No Sales Charges / Withdrawals |
219 |
|
Avoids Probate |
220 |
|
Safety / Reserve Requirements |
221 |
|
Liquidity / Inflation Protection |
222 |
|
No Investment Ceiling / Major Variable Annuity Features |
223 |
|
Moving Money from one Vehicle to Another |
223 |
|
Free-Look Period / SS Income Exclusion |
224 |
|
Investor Control / Professional Money Managers / Unlimited Contributions |
225 |
|
Commission Charges |
225 |
United Insurance Educators, Inc.
PO Box 1030
Eatonville, WA 98328
(253) 846-1155