Archive for March 31st, 2010

Annuity is no magic answer to retirement-income shortfall

Posted on March 31, 2010 by Jason

Philadelphia Inquirer, March 30th, 2010

For seniors, an annuity can be an appealing source of income, but it
also raises questions.

This week’s advice is from Sacramento, Calif., investment adviser
Michael R. Tate and estate planning attorney Tracy M. Potts.

QUESTION: My husband died in November and I only have his
Social Security income, plus $250,000 in insurance money that I want to
invest. To supplement the Social Security, I need about $2,500 more a
month in income. With the market as changeable as it has been and
interest rates so low, I can’t figure out where is safest to invest. I
cannot afford to lose a penny as it has to last as long as I will. I am
73.

What would you suggest? What do you think of an annuity?

ANSWER: First of all, I am sorry for your recent loss.
These times can be very challenging emotionally, let alone layering on
the challenges related to financial matters.

You raise a question we get often: the need for current income without
risking principal. Your additional $2,500 per month equates to $30,000
per year, which would represent a withdrawal rate of 12 percent from the
insurance proceeds in the first year. To make sure that money does not
run out, you would need to generate in excess of a 12 percent return.

Unfortunately, generating any return at those levels from the stock
market is nearly impossible, at least on a consistent basis. It would
involve a high degree of volatility and risk of principal, which I would
never recommend.

As for an annuity, I would look at some of the discount brokerage
companies in order to avoid excessive commissions or long surrender
charge periods that we typically see on these fixed-annuity options.

I strongly recommend doing a lot of research before committing to any
type of investment.

For example, I went to the Fidelity Investments’ Web site (www.fidelity.com),
which had an annuity product – based on your age and investment of
$250,000 – with guaranteed income of about $1,790 per month during your
lifetime, with nothing going to your heirs.

Read more of this article.

Annuity Advice for Retirement:   It’s always a good idea to get as much information as possible before deciding on whether an Annuity is right for you.  You can conduct the necessary research at NewRetirement.com.

Reverse Mortgage Saves Homes from Tax Auctions

Posted on March 31, 2010 by Jason

Reverse Mortgage Daily, March 31st, 2010

Tax Collector Jane Berendsen-Hill told the Ridgefield Press that two homeowneers were able to
save their homes after they were auctioned in the town’s tax sale by
using a reverse mortgage.

“They stayed in the ownership of the original owners and we got the
taxes,” she said to the Board of Finance. The news was met with some
applause from the small group attending the meeting said the Ridgfield
Press.

According to the press, the homeowners had six months form the date
of the auction to pay off the debts in order to keep the houses. Ms.
Berendsen-Hill said at the time that the tax auction was a necessary
part of enforcement but she was hopeful the homeowners could keep the
homes. All of the homes were several years delinquent on town taxes.

“We still have people who are very delinquent but not near the first
group [in the tax sale],” Ms. Berendsen-Hill said. “I’m not going after
anyone who is coming in and making an honest effort, no matter how
meager, to make payments and catch up. I think that is the only
reasonable thing to do at this time.”

Read this article.

About Reverse Mortgages:  Whether or not you find yourself in a position as dire as that of tax auctions for your house, a reverse mortgage can materially improve many people’s financial situations.  Consider the options at NewRetirement.com

Genworth Life Insurance Company Launches Total Living Coverage(R) Annuity

Posted on March 31, 2010 by Jason

PR Newswire, March 29th, 2010

Genworth Financial, Inc., (NYSE: GNW) announced today a new product
addition to help consumers move toward financial security and
independence.  Total Living Coverage® Annuity (TLCA) is a
linked-benefit product that links the safety and tax-deferred growth of a
single premium non-qualified deferred annuity with a long term care
(LTC) insurance rider to provide LTC benefits. The product will be
underwritten by Genworth Life Insurance Company.

“The financial
challenges facing Main Street consumers today have never been greater,”
said Buck Stinson, President of
Genworth’s U.S. Life Insurance Products.  “With Total Living Coverage
Annuity, consumers use their annuity value to purchase long term care
insurance coverage up to three times the amount of their single premium,
creating a pool of benefit dollars for long term care expenses paid
first from the annuity value and then from the remaining pool.”

In addition, claim
payments for covered long term care expenses are tax-free, allowing
consumers to keep more of their own money – thanks, in part, to tax
benefit provisions in the Pension Protection Act of 2006 (PPA).
Consumers may be able to fund TLCA with a tax-free 1035 exchange from an
annuity or life insurance policy.(1) “With TLCA, consumers who want to
purchase long term care insurance can now utilize additional sources of
funding to help them gain this protection,” said Stinson.

TLCA advantages
include:

  • Dependable and stable growth  
  • Protection
    in the event of a long term care need with guaranteed renewable long
    term care insurance
  • Simplified underwriting process
  • Optional
    inflation protection
  • Waiver of monthly long term care charge
    provision

Read more of this article.

Annuity Advice for Retirement:   For more general information on annuity programs, and how they can fit into your overall financial portfolio in retirement, you can browse the freely available information and analysis on NewRetirement.com

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