Just a simple rate movement over time of 3% (3.25% discount rate) would reduce the actual value of all inforce US Treasuries by as much as 40% of their market value. Think what would happen if interest rates went even higher? Disaster would loom and trillions of dollars would evaporate if these assets were liquidated. Of course there would be a winner: the US Taxpayer. Treasuries would be replaced with a higher earning interest rate bond, but at a far less value a third of its market value of the original bond.
Just imagine someone saying to you: “Mrs. Jones, how would you like to buy a sugar loaf, this sugar loaf is very unique, when you add sugar to your sugar loaf, the sugar increases but you do not have to ever pay taxes on the sugar the sugar loaf earns. Plus the interest earned on the sugar in your sugar load is fully guaranteed and the sugar loaf itself is also guaranteed. ”
What is the actual definition of a senior? Does that mean old folks? Does it mean retirees?
Five important questions to ask when you are considering an annuity.
The lingering question about the success of variable annuities as a sales vehicle is on the surface difficult to understand. By examining it closely and using the “new car” concept of selling, the focus is on the allure, the new paint, the transformation of us as drivers being behind the wheel and on it goes.
The record stock market gains of 2013 and the market’s ability to ignore everything from poor earnings reports to last April’s announcement of a QE3 decline in Treasury buying should be seen as a new wave of “irrational exuberance.”
We are now facing an economic situation similar to about 20 years ago, and I know from experience that you’re not going to like what’s about to happen to you and your important money.
Having weathered the economic crisis in 2008 with most of their value intact, fixed rate annuities have become the standard for retirement savings. Variable annuities, on the other hand, try to accomplish more than that. Higher Risk investments may generate more income for the annuity holder, but this income can be reduced by the fees charged for maintenance of these accounts. In addition, if the market loses money, your account value decreases with it and fees still are charged on your variable annuity.
There are a number of different choices you can make when setting up your income annuity. These choices will determine how much money you receive each month, how much you leave to your heirs, and other important choices.
Fixed Indexed Annuities are valuable tools for many who are planning their retirement. Along with a company pension and social security, a Fixed Indexed Annuity can provide the basis for guarantees in a retirement plan. Fixed indexed annuities are excellent investments that allow you to enjoy the benefits of interest linked to the market without being affected by market risks.