Apr 27

Pre-Retirees Seeking Guaranteed Income Stream

By admin | Retirement

Pre-Retirees Seeking Guaranteed Income Stream

The most recent retirement market analysis from LIMRA Secure Retirement Institute predicts that over the next 10 to 20 years and beyond, there will be an unprecedented migration of people and assets moving into retirement.

By 2025, says LIMRA in The Retirement Income Reference Book 2015,  a reference that provides insights on the retirement market and that addresses the various facets of both planning and managing retirement income, a whopping 66 million Americans will leave the workforce and retire. That number is even more significant when one realizes that within the next 10 years, the number of retirees in the U.S. will increase by 40 percent from the current figure of 48 million retirees.

The skyrocketing number of retirees, largely from the Baby Boomer generation, will shift a considerable $25 trillion in assets toward retirement income, roughly double the amount available today. In addition, investors aged 60 and older control nearly 60 percent of all financial assets in the U.S.

In a LIMRA podcast,  “Explore Opportunities in the Retirement Income Market,” Jafor Igbal, assistant vice president of LIMRA Secure Retirement Institute and author of the reference book, discusses key research findings and identifies emerging trends. In the podcast, Igbal identifies three important opportunities in the retirement income market for the industry in general and advisors in particular:

1: Guaranteed lifetime income solutions: More than 40 percent of pre-retirees are interested in converting at least some of their assets to a product that will assure a lifetime stream of income. The market for converting pre-retiree assets into future guaranteed income is considerable, estimated to be $575 billion. And current retirees who are seeking guaranteed income add another $180 billion to that number.

2: Rollover market: According to the LIMRA research, the rollover market is estimated to be currently $455 billion, expected to grow to $550 billion by 2018. About one-quarter of retirees are strongly motivated to roll out money when discussing retirement income with an advisor prior to retirement. In the future, potential Department of Labor (DOL) regulations could significantly impact these rollover discussions.

3: Retirement income planning:  LIMRA Secure Retirement Institute research consistently points to consumers’ concerns about having sufficient money after retirement. More than 40 percent of pre-retirees aren’t confident about their financial security after they leave the work force. Pre-retirees who work with an advisor are nearly twice as likely to have completed retirement planning activities like estimating how long their assets will last and setting a strategy to generate income in retirement.

The LIMRA volume reveals that there are four important disruptors challenging the industry right now: changing demographics, evolving technology, expanding regulations and an unprecedented migration of people and assets into retirement. The challenges will also represent valuable opportunities for companies that can respond to these dynamics.

Annuities can offer retirees and pre-retirees that much sought-after guaranteed income stream after retirement. Products like fixed income annuities (FIAs) can not only provide retirees with regular payouts, but can also assure the safety of the initial annuity principal.

Apr 17

Annuity Riders

By admin | Retirement

Many people are familiar with the concept of riders and how a rider pertains to homeowner’s insurance. For example, if a homeowner possesses valuable art investments, the homeowner may elect to purchase an insurance rider in order to gain extra coverage beyond a standard policy, just to protect their art investment. An annuity rider is similar, in that it can be purchased and attached to an annuity contract. Whereas riders on insurance policies protect and insure property, annuity riders protect principal and income.  To read the rest of this article on our site, annuityvault.com, please click here.

Annuity riders on fixed annuities are designed to guarantee the policyholder a fixed, specified dollar amount for a specific period of time. Such a rider protects the annuity holder by ensuring that the holder will receive guaranteed distributions in a certain dollar amount and thus the rider protects the annuity owner’s income.

The most common type of annuity rider is the income rider. One popular type of income rider is the guaranteed income rider. This rider is attached to an annuity in order to provide the purchaser with a secure retirement income. Usually the contract involves a single, or lump-sum premium, in exchange for which the payments are guaranteed on a monthly, quarterly or yearly basis. Withdrawal benefits provide options for withdrawing sums and percentages of growth on investments. Some annuities are available with certain benefits already attached, while others allow the attachment of this rider based on the annuity buyer’s preference.

Another often seen annuity rider is a death benefit. If the policy owner dies, the person selected as a beneficiary will receive either all of the money in the account, or some guaranteed minimum (such as all purchase payments minus prior withdrawals).

A return of premium rider guarantees that the annuity owner will receive a return of at least the initial amount paid as the premium. The withdrawals can be structured in any number of ways, but the most important feature is that under no circumstances will he or she be paid less than the amount invested.

Annuity riders are very valuable features to add when purchasing an annuity. The rider can be tailored to the specific needs of a given purchaser, most commonly being used to provide GUARANTEED lifetime income.  It is important to know the options available, as well as the possible advantages and disadvantages of any given annuity rider.  Let us help you explore your annuity options and find the right annuity product for your situation.

Apr 16

Top Ten Annuity Myths Exposed

By admin | Retirement

Courtesy of Annuities Institute

New market report reveals annuity critics are often biased and incorrect in their perceptions of annuities within retirement planning

While annuities have played an integral role in retirement planning throughout most of the last century, a new report reveals that the average consumer is now ten times more likely to read information designed to discourage annuities rather than endorse them.

The market study completed by Annuities Institute included the analysis of more than 500 popular consumer articles on financial planning and annuities. From the review, 93 percent of the documents researched contained inaccurate and damaging assessments of how annuities work within retirement plans.

The Annuities Institute research included compiling the most common misconceptions published on annuities, and then sharing them with professional planning advisors and retirement specialists nationally. Their comments and input were then compared against consumer satisfaction surveys sampled from a base of more than $500 billion of annuities sold to consumers between 2001 and 2005. Among the top negative press strategies and fallacies recorded:

Every Annuity Is a Variable Annuity

Very often, the risk properties of the variable annuity are incorrectly referenced on behalf of all types of annuities, undermining consumer knowledge and confidence in non-security-based investments such as fixed and immediate annuities. The strength and security of these annuities are not based on stock market performance however, and offer guarantees through fixed minimum interest rates and future protection against loss of principal and earnings.

Your Insurance Agent Isn’t Qualified to Offer Financial Planning

Some investment managers will diminish the value of annuities on the grounds that the insurance representative does not need a securities license to provide investment advice. A securities license is only needed, however, when selling speculative investments where the potential for loss exists. Many insurance providers focus on fixed and indexed annuities for retirement where loss to principal and earnings is not an option for their clients. They also undergo continual training and professional courses year-round to improve their knowledge.

Fixed Annuities Will Never Outperform Inflation

The fixed annuity offers security in knowing you are guaranteed a set interest rate over a specific period of time, and is often used to give long-term investments more growth return and tax advantages over CDs. Some investment advisors are against fixed annuities because of their perception of future inflation. They feel that some risk must be taken to grow savings to maximize personal wealth. For investors who cannot afford to lose any of their life savings, though, risk should never be a substitute for long-term planning and new income generation.

Annuities Are All About Penalties and Surrender Charges

Like the 401(k) and IRA, the annuity takes advantage of special legislation passed by Congress that provides incentives for individuals to save more money for their retirement. The long-term savings approach allows annuity providers to offer higher interest rates, guaranteed security, tax-deferred accumulation, and positive planning benefits for tax and distribution planning. No one would typically write negative articles about how an IRA or 401(k) incurs unnecessary penalties for accessing money before age 59 ½. Annuities are designed to provide long-term security, and the knowledge that a lifetime of savings will not be diminished due to unforeseen factors.

Commission-Based Planners Must Be Biased

It wasn’t all that long ago that fee-based planning was created by financial firms to ease client fears of non-objectivity. Their goal was to maximize medium-term earnings and residual income, while having more control over client investments. Ironically, many within that field do not even actively represent or sell fixed, indexed or immediate annuities for retirement purposes, even when safety and risk tolerances determine that any level of risk is not appropriate.

Never Invest Your IRA Money in an Annuity

A frequent caveat found within tips on how to qualify your financial advisor is to automatically disregard anyone who ever recommends an annuity within an IRA. The exception to this, of course, is when safety is paramount and loss to principal is not an option, and the annuity offers a higher rate of return than other forms of investment. Many fixed and indexed annuities outperform other non-security investments while removing risk to principal and savings.

Only Deal with Big Names You Are Familiar With

While people typically gravitate toward big companies with names that are instantly familiar, brand visibility doesn’t automatically mean the best rates, service and performance. Restrictive affiliations and objective advice do not normally go hand-in-hand, as it can limit the guidance you receive for key financial decisions. Make sure the planner you select is not restricted in the advice and recommendations they can make to you.

Only Deal with Registered Investment Advisers

Some of the criticism of annuities comes from professional asset managers who earn their commission as a percentage of the total money they manage and keep at risk for growth. Many of them often forget that every investor is not after great wealth within the stock market, and too often seniors are talked into placing their money in vehicles that could instantly reduce their life savings. There is a significant difference between the professional investor who wants to aggressively grow their million-dollar portfolio, and the retiree with $150,000 that will likely need every dollar and more to get through their retirement without outliving their savings.

Indexed Annuities Are Often Sold Inappropriately

The opinion of many stockbrokers is that indexed annuities are often sold inappropriately to seniors, as they limit the total earnings an investor can receive during upswings in market performance. The indexed annuity was purposely created, though, as a hybrid investment that combines the growth potential of the stock market with the safety features of a fixed annuity. While potential upsides may be capped at 7 percent to 12 percent, an investor never has to worry about losing their life savings, and typically has several options by which to guarantee minimum interest rates paid regardless of performance. As far as suitability goes, according to consumer data from the National Association of Insurance Commissioners, in 2004 equity indexed annuities reached sales of $23.3 billion, with only 38 closed complaints nationally, or $614 million of sales for each complaint received.

This information was provided by the Annuities Institute, which was created by a national, independent network of financial advisors, insurance specialists, and retirement planners. Its members work to provide objective and independent assistance in evaluating annuities to help reach retirement, income generation, tax reduction, and asset protection goals.

Apr 09

A Comprehensive Guide To Annuities And Annuity Investing

By admin | Retirement

What Are Annuities?

In its simplest definition, an annuity is an amount payable annually. For our purposes, however, an annuity describes a contract offered by an insurance company that allows you to accumulate funds for retirement on a tax-deferred basis. Upon retirement, you’ll receive income from the annuity that can be guaranteed by the insurer to last either a fixed number of years, or as long as you live.

An annuity is neither life insurance nor a health insurance policy, and it’s not a savings account or a bank Certificate of Deposit. Your value in an annuity contract equals the premium payments you pay in, plus interest credited, less any applicable charges. The insurance company uses this value to calculate the amount of the benefits you’ll receive from them when you begin taking distributions.

How Do Annuities Work?

An annuity is an investment vehicle primarily for accumulating retirement savings. Again, you pay premiums to the insurer and, in return, they pay you an income stream at a later date. Based on this description, you’ll see that there are two phases to an annuity:

  • The Accumulation phase
  • The Payout phase

During the second phase, called the Payout phase, the company pays income to you, or to anyone else you choose. Unlike many other retirement savings instruments, you will typically have flexibility in how you receive your funds. For instance, you can choose to receive, say, a 10-year payout, 20-year payout, or even a lifetime payout of income.

How Do Annuities Best Serve Investors?

The two primary reasons to invest in an annuity are:

  1. You want to save money tax-deferred for a long-range goal (like retirement)
  2. You want an income stream for a certain period of time.

There are other strategic estate planning situations where annuities may be warranted as well, but these will be dependent on your specific financial situation. The rest of this guide will focus on understanding how annuities work, the various types that exist and what role annuities should play in your financial planning.

What Are Some Types of Annuities?

While annuities might seem complex at first, by breaking them into the following components they become easier to understand.

  • How money is paid into the annuity contract
  • How money is withdrawn
  • How the funds are invested

There are two broad classes of annuities: “Deferred” annuities and “Immediate” annuities. Each class has numerous sub-classes.

Deferred Annuities

A deferred annuity is most appropriate for people who want to:

  • Save for future retirement
  • Not touch the principal and interest until age 59½ or older
  • Find an investment that will earn tax-deferred interest for many years
  • Save more than the maximum annual contribution of their IRA or 401(k)

​With a deferred annuity you pay a premium to the insurance company which issues a contract promising to pay interest made on the premium while deferring the income and the taxes until you actually withdraw the money or begin receiving an income.

There are three major types of deferred annuities:

  1. Fixed Deferred annuities
  2. Equity-Indexed annuities
  3. Variable Annuities

Fixed Deferred Annuity

A fixed deferred annuity pays a guaranteed “fixed” interest rate (based on the current market rates of interest) where the earnings compound and grow tax-deferred. Fixed annuities offer safety of your principal from typical day-to-day market fluctuations in the stock, bond or other investment markets. However, since this rate of return is fixed, it is important to consider the impact of inflation on your investment.

You will also want to consider the financial strength of the annuity-issuing insurance company, since the return of principal and interest is guaranteed by them. Several independent financial analysis companies such as A.M. Best and Standard & Poor’s rate the strength of such insurance companies for you.

Equity-indexed Annuity

An equity-indexed annuity differs from a fixed deferred annuity in that the rate of return on your investment is based upon the better of either a) the growth of a named stock market index, such as the Dow Jones Industrial Average, or b) a minimum guaranteed interest rate.

Many equity-indexed annuities offer you a portion (not a full 100%) of the index gains. Still, this type of annuity does allow for potentially higher returns than a typical fixed annuity, since you can participate in a rising stock market, yet be protected on the downside by the minimum guaranteed rate of return.

Variable Annuity

A variable annuity allows the flexibility to invest your funds in a wide range of investment options through “sub-accounts.” Sub-accounts are somewhat similar in design to mutual funds, and allow for investing in stocks, bonds, money markets – even guaranteed fixed rate instruments.

The ability to choose, and change, investment options provides you the advantage of participating fully in any market gains (not fractionally), thus potentially providing even higher returns than equity-indexed annuities. However, unlike equity-indexed annuities, many (though not all) variable annuities offer no guaranteed rate of return. Therefore, the value of the variable annuity and its sub-accounts will fluctuate day-to-day, based on the performance of the underlying investments you choose.

Such an annuity may be better suited for those investors with a longer term time horizon, who can afford these day-to-day market gyrations. As with a fixed annuity, any gains in the variable annuity credited to the account are tax-deferred until the funds are withdrawn. Unlike a fixed deferred annuity, your funds are not guaranteed by the insurer against market fluctuations, including risk of principal. A key benefit of variable annuities is the ability to transfer assets among the various investment options, as necessary, in response to market conditions or your changing investment goals without incurring current taxes on any capital gains and/or income.

Immediate Annuity

An Immediate Annuity is most appropriate for people who want to:

  • Retire in the very near future, or are already retired
  • Begin drawing an income from a lump sum of money that they currently have already accumulated for retirement.
  • Receive an immediate and predictable payout
  • Receive a steady payout for life (based on life expectancy)

​The immediate annuity allows you to deposit a lump sum and begin receiving regular payments normally within one year after the deposit. It is usually funded with a single premium, and purchased by retirees with funds they have accumulated for retirement. These annuities can provide a predictable stream of payments that will continue for the rest of your life, or for a time period you choose.

Fixed vs. Variable Annuities

The choice of fixed versus variable annuity depends primarily on the specific needs of the investor.

A Fixed Annuity is most appropriate for people who want to:

  • Earn a tax-deferred fixed rate of interest without any market risk
  • Save on contract expenses and management fees
  • A Variable Annuity is most appropriate for people who want to:
  • Have the opportunity to make more substantial gains, depending on market and sub-account performance
  • Respond to changing market conditions by transferring money to different funding options within a variable annuity, without paying taxes on any earnings you have made. Proceeds from annuities are not subject to probate and may be passed directly to your designated beneficiaries.

Retirement Income Considerations

You will have several options when it comes to deciding how you want to receive your annuity income. Here are a few things to consider before making your decision:

Your Age and Health:

Life expectancy continues to increase. The average person, living a healthy lifestyle, may expect to live longer. Studies show that there is a 48% chance that one member of a couple age 65 today will live to be age 95. It is conceivable that you could spend as many years in retirement as you did working towards retirement.

Sources of Retirement Income:

In the past, defined plans such as Social Security and an employer-sponsored plan were the major sources of retirement income. Today, these plans provide a smaller portion of retirement income requiring you to provide a larger portion of your retirement income.


Inflation, regardless of rate, will erode the value of your savings and reduce your spending power. Taking this into account, it is important that you plan your retirement carefully. You need to review all sources of income so that you can determine whether you will have sufficient income for your entire retirement.

Apr 08

Annuities and Retirement Planning

By admin | Retirement

Annuities are an important part of any retirement plan due to the fact that annuities are safe, secure and risk free. An annuity allows you to accumulate funds for retirement on a tax-deferred basis, and upon retirement you will receive income  from the annuity that can be guaranteed by the insurer to last either a fixed number of years, or as long as you live and your spouse can be included.

Some annuity products may fit your goals better others. Why? Annuity products are designed for a specific purpose and aligning them with your personal goals is essential.   In general, the decision on whether an annuity is right for your depends on your needs and goals. Consider the following benefits an annuity can provide.

  • Lifetime income stream, Regardless of How Long You Live, You Cannot Ever Outlive Your Money!
  • Tax-Deferred Growth
  • Competitive Fixed Interest Rates
  • Protection Against Market Downturns, Your Funds are Guaranteed
  • Death Benefit Options
  • Access to Your Money


Oct 21

Sales of All Fixed Annuity Product Types Rise in Second Quarter 2013, Beacon Reports

By admin | Retirement

Deferred Income Annuity Sales Up Nearly 40%

EVANSTON, Ill., Sept. 3, 2013 (GLOBE NEWSWIRE) — For the first time in two years,all fixed annuity product types posted sequential sales gains in second quarter 2013, according to the Beacon Research Fixed Annuity Premium Study. Indexed and deferred income annuities (DIAs) results hit record highs. Second quarter’s improved interest rate environment helped to boost sales.

“In addition to the quarter’s rising interest rates, the steepest yield curve in nearly two years enabled carriers to increase the rates they offered on fixed rate and indexed annuities. Credited rates on 5-year CD-type fixed annuities rose by an average of 35 basis points,” said Jeremy Alexander, CEO of Beacon Research. “DIA sales were up almost 40% from first quarter due to continued demand for retirement income, larger payouts and new product introductions.”

Total fixed annuity results were $17.1 billion in second quarter, up 14.6% sequentially and 0.2% from a year ago. Sales of indexed annuities increased 17.1% from first quarter to $9.1 billion. Income annuity results, which include DIAs, grew 16.9% sequentially to $2.6 billion. Sales of market-value-adjusted (MVA) annuities rose 34.9% from the prior quarter to $1.3 billion, largely due to big gains by two products.


New York Life was the top-selling fixed annuity company in second quarter 2013, followed by Security Benefit Life, Allianz, American Equity and Great American Life. New York Life switched positions with Allianz. Security Benefit Life and American Equity remained in second place and fourth place, respectively. Great American entered the top five in fifth place.

Second quarter results for the top five Study participants were as follows:

Total Fixed Annuity Sales (in $ thousands)
New York Life 1,470,446
Security Benefit 1,434,104
Allianz Life 1,264,400
American Equity 1,135,553
Great American 837,615


Security Benefit was the new top seller of fixed-rate non-MVA annuities, jumping from sixth place in the previous quarter. Symetra moved from third place to become the new leader in bank channel sales. Pacific Life took the lead among independent broker/dealers, up from second place. The other top companies in sales by product type and distribution channel were unchanged from the prior quarter.

New York Life and Security Benefit Life each had two of the five top-selling fixed annuity products in second quarter. New York Life’s Lifetime Income Annuity regained the top position from Security Benefit Life’s Total Value Annuity, which moved to second place. Security Benefit Life’s Secure Income Annuity and American Equity’s Bonus Gold remained in third and fourth places, respectively. New York Life’s Secure Term MVA Fixed Annuity joined the top five in fifth place, up from 12th place last quarter, and was the first MVA annuity in the top five since third quarter 2009.

Rank Company Name Product Name Product Type
1 New York Life NYL Lifetime Income Annuity Income
2 Security Benefit Life Total Value Annuity Indexed
3 Security Benefit Life Secure Income Annuity Indexed
4 American Equity Bonus Gold Indexed
5 New York Life NYL Secure Term MVA Fixed Annuity Fixed-Rate MVA


“We expect a modest increase in total fixed annuity sales in the coming months should interest rates continue to rise,” Alexander concluded. “DIAs probably will continue the strong growth pattern we’ve seen in the past 18 months.”

About the Beacon Research Fixed Annuity Premium Study

The quarterly Study is the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis, and the first to put a decade’s worth of historical industry, company and product sales information in an easily-searchable online database at www.annuitymarketstudy.com.

About Beacon Research

Beacon Research tracks fixed, indexed and variable annuity sales, rates and features, and provides web-based systems at www.annuitynexus.com for distributors and insurance companiesBeacon also licenses information and software tools to other platforms. Beacon’s fixed annuity benchmark series — the industry’s first – is available through Ibbotson Associates. Directly and through strategic alliances, Beacon information can be accessed by hundreds of financial institutions and other distributors, as well as thousands of advisors and agents.




Sep 02

Financial Planning Tips

By admin | Financial Planning

[framed_video column=”two-thirds”]http://youtu.be/ctbIRqsggZ8[/framed_video]
  • We’re in “Budget Boot Camp” all week on Making it in America
  • Finance guru Suze Orman says there’s one type of debt that’s much more dangerous than all the others…and you probably have it!
Sep 02

Fixed Annuities: Pulling back the curtain

By admin | Annuities

We all saw the original Wizard of Oz movie when they went to see the powerful Oz and were totally in awe until the dog, Toto, pulled the curtain back to show that it was just some goober running a sound board.

That curtain needs to be pulled back on indexed annuities as well because “the show” is getting to be a little overwhelming on the lunch seminar circuit and with the increasingly aggressive online annuity promoters.

First of all, let me explain the details of an indexed annuity (also called an equity-indexed annuity, fixed-index annuity, hybrid annuity). An indexed annuity is a fixed annuity with a call option on an index, usually the Standard & Poor’s 500 Index. The vast majority of the call options are one year in length, but can be as long as five years. The S&P 500 index represents over 90% of the index option choices even though other index selections (Dow, Nasdaq, etc.) can be found in some product offerings. These call options allow you limited participation in the upside of the index (not including dividends).

When indexed annuities were developed a couple of decades ago, they were designed to compete with CD returns, not market returns. They were never put on the planet to be a pure growth product, even though they are sold that way by agents and the online annuity spammers. Realistic and historical (yes agents, these are also called facts) return expectations for indexed annuities should be around 3% to 5% annually. Those annual gains, if any, are locked in at the contract anniversary date, and then a new index option starts.

Please understand that indexed annuities are complex products, and the majority of agents are unable (or unwilling) to properly explain them and usually just focus on a few sizzle points. Below I have listed some of the positive and negatives of indexed annuities and where they might work within your portfolio.


· Used with Income Riders for target date income planning

This is how I use indexed annuities for my clients. I also attach contractual death benefits or confinement care benefits when that is the ultimate goal.

· Downside protection

Because your potential gains are attached to a call option, if the markets go down and the call option expires worthless at your contract anniversary date, then you will not lose any money. Agents use the phrase “Zero is your hero.” That’s a pretty goofy way to put it.

· Gains locked in

This is a very good feature of indexed annuities. If you have gains from your index option, that gain is locked in permanently, never to go below that amount. Just remember that your upside potential is very limited, regardless of what your agent tells you.

· Possibility to capture market dips

As an example, if the S&P 500 index goes from 1,300 to 900 in one year, your index option for that year would not credit any gains, but you would start the next index option year at 900 on the S&P 500.

· Higher actuarial payout for income

Most indexed annuities, when used for lifetime income purposes with attached income riders, have a higher actuarial percentage payout than similarly structured variable annuities.


· Limited upside

For example, if the cap on the upside is 4% and the S&P 500 returns 15% during your one-year option, then you will receive 4%.

· No dividends

We all know that a large majority of the returns of the S&P 500 are dividend based. Indexed annuity options returns do not include those dividends.

· Complicated call options

With index option verbiage like “spread”, “cap”, “point to point”, “monthly sum”, most agents aren’t capable of showing you how the math calculations work on these option choices.

· Slave to the anniversary date

With the majority of index annuities, your gains are locked in at the contract anniversary date. I don’t think I need to explain how limiting that “one day a year” strategy can be when it comes to market returns.

· Riders are not yield

Agents love to blur the lines between income riders and real return. Don’t be fooled into believing that Jimmy Carter Interest rates are back.

· Long term surrender charges

Most indexed annuities sold have 10-year products with 10 years of surrender charges, or more. There are index annuities as short as four years, but you can probably guess why agents will never show you that short of a term.

· First year teaser rates

A lot of times, annuity companies might offer a high “cap” the first year to get you locked into the product, then stick it to you once you are there.

· Upfront bonuses

Buying an annuity for the upfront bonus is like buying a car for the stereo. Common sense will tell you that if you get a bonus, then the carrier is taking something away somewhere else in the contract.

Where They Fit

I typically recommend indexed annuities with attached income riders and only use that combination for target date income planning. I currently do not recommend indexed annuities as a growth strategy because I think that there are better non-annuity choices for that part of your portfolio.

If you take away one thing about indexed annuities it should be this: The upside to an indexed annuity is that there is no downside. The downside to an indexed annuity is that there is very limited upside.

That is the reality (good and bad) of indexed annuities.

Originally post: http://www.marketwatch.com/story/behind-the-indexed-annuity-curtain-2013-01-14?pagenumber=1