We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Income in Retirement? Consider an Annuity, but Understand the Risks

    July 19, 2017 by Jennifer Waters

    Are there two more precious words for retirees than “guaranteed income”? Annuities can offer that constant payment stream to last throughout your golden years, but annuities come in a variety of types and structures, and they may not be for everybody, so it’s important to do your homework.

    In a sense, an annuity is not unlike Social Security or a pension—you make a series of payments, or a lump-sum payment up front, and down the road, you receive a periodic distribution, generally monthly, for the rest of your life. So if you’re interested in having a guaranteed minimum income in retirement, say, to cover your fixed costs, you might consider an annuity. 

    Annua Explico

    What is an annuity? The Latin root of the word is “annua,” which simply means “yearly.”

    The origin of annuities dates back to the Roman Empire, when “annua” referred to a contract for annual stipends from a large pool of money to which individuals contributed with a single large payment. From a conceptual standpoint, not much has changed, except that the number of available annuity alternatives has increased.

    In general, an annuity might be a solid investment alternative if you’re looking for another route to potentially insulate a chunk of your retirement funds. And it’s important to remember that annuities are not an all-or-none proposition; you don’t need to put all of your assets into an annuity. Some financial professionals recommend placing enough of your portfolio into an annuity such that your expected monthly distribution will cover your typical monthly expenses.

    Annuities also tend to be a go-to instrument for wealthy families wanting to put more money away for retirement than typical accounts allow. Unlike IRAs and 401(k)s, there’s no limit to how much you can sink into an annuity each year.  

    Annua: Multa Electiones

    Though there are many types of annuities, they come in two main groupings —deferred and immediate. As the names imply, one allows you to invest the money for a period of time and lets it grow before you start drawing on it, while the other lets you begin receiving payments soon after the initial investment.

    Under those two groupings are three types of annuities:

    • Fixed annuity: returns a set amount each month based on the investment and can act as a hedge against market fluctuations.
    • Variable annuity: the payout varies each month based on how the investment is performing. That means if there’s a market downturn, the payments will likely drop, though some variable annuities come with promises that the monthly check will never go below a certain amount.
    • Indexed annuity: the payment depends on the rate of return of a specific market index, though it can be capped.

    The monthly amounts of guaranteed income rest on the types of annuity, how much you invest and how the investments perform. They’re also built on something called “mortality credits,” or a calculation that determines how long you’re likely to live. Since women typically live longer than men, their monthly payout tends to be lower.

    An immediate annuity might be an alternative if you’re already in or nearing retirement and looking to complement Social Security and other retirement investments, for example.

    And remember, when you purchase an annuity you’re essentially trading your principal for a payment stream, so the total you ultimately receive is determined by how many monthly payments you’ll receive (meaning, “how long you live.”)

    Caveat Emptor

    A word of caution about some annuities: Annuities are generally sold through an investment professional such as a broker or an insurance agent, and the salesperson typically receives a commission, reaching as high as 10%.

    Some annuities, often the variable annuity type, also carry an annual fee of up to 2%-3%. And since it’s a fixed percentage, as the money grows in the account, so, too, does that annual fee. Some experts will steer annuity buyers to purchase a direct-sold annuity, which comes straight from an investment firm rather than an insurance sales person.

    When purchasing an annuity, be sure to research the company that’s holding it and its track record. Some of the fine print to look for include the wording on fees, participation rates, and performance floors and caps. Also, should you decide you want out, you’ll have to pay a “surrender charge,” which can be costly, so you’ll want to know those ground rules up front.

    Ultima Verba

    Annuities can offer a tax-deferred stream of income for your retirement years until the end of your life. That’s good news, right? Yep, just like an IRA or 401(k), you can sock money into the annuity without paying taxes as it grows. And remember, there are no annual limits to how much is put aside. But once you start receiving payments, they’re taxed as regular income, not capital gains, so you might want to consult a tax professional before investing.

    And if you withdraw from a deferred annuity before you turn 59½, you’re likely hit with that same 10% penalty that the IRS assesses on early withdrawals from IRAs or 401(k)s.

    Annuities can be an effective addition to a retirement plan, but they’re not for everyone, and like any investment, an annuity should be thoroughly researched before you jump in. Contact a reputable annuity specialist who can review your long-term investment strategy to determine if an annuity works with it, and who can help you find the most competitive solutions. 

    A Good Fit?

    Let’s find out if an income-generating annuity might make sense for you. Contact our annuity specialists at 800-347-7496.

    Investors should carefully consider a variable annuity’s risks, charges, limitations, and expenses, as well as the risks, charges, expenses, and investment objectives of the underlying investment options. This and other important information is provided in the product and underlying fund prospectuses. To obtain copies of the prospectuses, contact an annuity specialist at 800-347-7496 or email annuities@tdameritrade.com. Please read them carefully before investing.

    The information presented is for informational and educational purposes only. Content presented is not an investment recommendation or advice and should not be relied upon in making the decision to buy or sell a security or pursue a particular investment strategy.

    NC

    Originally Posted at Ameritrade, The Ticker Tape on July 12, 2017 by Jennifer Waters.

    Categories: Industry Articles
    currency