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Annuities blog
Reading your annual annuity statement line by lineA walk through a typical annual annuity statement, with an invented example that ties out to the dollar and the questions to ask when your own numbers do not.What to do during the free-look window after buying an annuityA day-by-day plan for the free-look period: confirm delivery, check the contract against your application, test the cancel steps and decide whether to keep it.Before you replace an annuity: what to check about what you loseA grouped checklist for anyone asked to swap one annuity for another, covering exit charges, new lock-ups, lost guarantees, rider bases, commissions and forms.Benefit base versus account value: the number income riders really useWhy a lifetime income rider keeps two numbers, how roll-ups and step-ups grow only one of them, and why the benefit base is never a lump sum you can withdraw.Does tax deferral pay for an annuity's costs? A break-even worksheetA worksheet comparing a taxable account with a deferred annuity on round assumptions, showing how time, fees and tax rates move the break-even.Free withdrawal provisions: how people trigger surrender chargesEight ways owners go past an annuity's free withdrawal amount by accident, with the dollar cost of each and a simple way to track what you have already taken.Owner, annuitant, beneficiary: how three roles change what happens at deathFour hypothetical households show how the owner, annuitant and beneficiary roles on an annuity decide whether a death benefit is paid or the contract goes on.Questions to ask an agent before you sign an annuity applicationTwenty-odd questions on liquidity, fees, guarantees, taxes, insurer strength and replacement, with what a good answer sounds like and where to confirm it.How to read an annuity contract page by page before you signA guided tour of a deferred annuity contract, from the data page to the riders, showing which pages hold real guarantees and which only describe hopes.Reading a surrender charge schedule before you need the moneyA year-by-year walk through a sample annuity surrender schedule: how the percentage applies, what the free amount shields, what resets the clock, where to look.Three retired couples, three ways an annuity fits or does notThree hypothetical couples with different pensions, savings and health show when guaranteed income closes a gap, adds little or works best in part.Annuity in an IRA: how required distributions and income riders mixQuestions and answers on required minimum distributions from an IRA annuity: how they are figured, how riders can count, and when a withdrawal can shrink one.Rolling a 401(k) into an annuity: direct, indirect and in-plan pathsA step-by-step playbook for moving 401(k) money into an annuity: the three paths, the 20 percent withholding trap, and what to ask the plan and the issuer.Sequence-of-returns risk and how guaranteed income changes the pictureTwo invented portfolios with the same returns in opposite order show how bad early years hurt withdrawals and how a guaranteed income floor shifts market risk.When to switch on an annuity income rider: waiting or starting nowWhen to begin withdrawals under a lifetime income rider: age bands, a break-even worked example, health and other-income criteria, and a decision list.How to do an annuity 1035 exchange, step by stepA walkthrough of an annuity-to-annuity 1035 exchange: what to gather, how the transfer moves, how basis carries over and what to confirm before and after.Declared rates and non-guaranteed elements in annuity contractsA checklist sorting annuity contract terms into guaranteed or changeable: renewal rates, caps, participation rates, spreads, fees, and the limits to look for.Fixed annuity or bank CD: how safety, tax and access really differA side-by-side look at a fixed annuity and a bank CD: what backs each, who insures it, how interest is taxed, what leaving early costs and what heirs receive.Rates rise after you buy: what happens to the fixed annuity you holdFour hypothetical owners decide whether to stay, exchange or wait after market rates climb, with the arithmetic of lost interest against surrender cost and MVA.Work out an indexed annuity credit by hand with your own contract termsA worksheet for working out an indexed annuity's yearly credit from index values, cap, participation rate and spread, with worked examples and blanks.Eight claims about indexed annuity returns, tested one at a timeSales claims about indexed annuities, such as no losses and market-like gains, checked against caps, spreads, crediting dates and what the contract guarantees.Market value adjustments: why your annuity value can move on exitHow a market value adjustment works when rates rise or fall, which exits trigger it, why it can add or subtract, and where the contract states the formula.The minimum guaranteed value in a fixed annuity: what the floor protectsHow nonforfeiture laws put a contractual floor under a fixed annuity, how the minimum is calculated and why it rarely matches the credit on your statement.Your multi-year guaranteed annuity is maturing: the choices aheadThree hypothetical households face a MYGA maturity and weigh renewing, exchanging, taking cash or turning it into income, with the arithmetic and the deadlines.Premium bonus annuities: how the bonus gets paid forSeven claims about premium bonus annuities tested against vesting, crediting, surrender and tax rules, with an invented case where a bonus nets out to little.Enhanced death benefit riders on annuities: what they pay and costReturn-of-premium, step-up and roll-up death benefit designs compared with invented numbers: what each pays an heir after a market drop, and what it costs.RILA buffers and floors: how an index loss lands on your accountBuffer and floor protection in a RILA compared with a round example loss, showing who absorbs which slice and why term length and early exits change the result.Add up your variable annuity's layered fees in actual dollarsA worksheet that turns a variable annuity's percentage charges into yearly dollars on an illustrative balance, with where to find each line in the prospectus.Mistakes people make when they turn an annuity into incomeCommon errors at annuitization, including irrevocability, skipped survivor options, bad timing and tax surprises, with what each costs and how to avoid it.Buying annuities in stages: a timing walkthrough over several yearsA multi-year timeline for staggering income annuity purchases, with the trade-offs, the arithmetic of waiting and checkpoints that need no rate forecast.Planning a deferred income annuity start date from 65 to 85A timeline of start ages for a deferred income annuity: bigger checks against the wait, break-even logic and death before payments start.A flat annuity check and inflation: how purchasing power erodesA level income annuity check never changes in dollars, but prices do. Round-number arithmetic shows the erosion over 20 years and ways to offset it.A short income annuity as a bridge to delayed Social SecurityHow a limited-term income annuity can fund the early retirement years so Social Security can be claimed later, with criteria, risks and alternatives to compare.An income rider on a deferred annuity versus a plain income annuityTwo ways to buy lifetime income compared on cost layers, access to principal, legacy, payout rules and tax, using round invented figures and no real rates.Living to 95: how longevity risk figures into the annuity questionQuestions and answers on longevity risk, pooling, mortality credits, why average life expectancy misleads, and what planning for a long retirement requires.Partial annuitization: turning only part of a contract into incomeDeciding whether to convert part of a deferred annuity into guaranteed payments: what stays liquid, how basis splits, and a decision list.Pension lump sum or monthly annuity at retirement: a decision frameworkCriteria for choosing a pension lump sum or monthly annuity, with break-even arithmetic, survivor options, rollover rules and questions for the administrator.Period certain, cash refund and installment refund options comparedWhat each guarantee on an income annuity pays heirs after an early death, how much each lowers the monthly check, and who each suits, with illustrative payouts.How a QLAC changes required minimum distributions: a worked exampleA worksheet showing how a QLAC premium leaves the RMD calculation, with an illustrative IRA, blanks for your numbers, and the age-85 and premium-limit rules.Single life or joint-and-survivor: choosing how an income annuity paysHow survivor protection lowers an income annuity's starting payment, what a surviving spouse keeps, and a decision list on health, pensions and survival.