Annuity – Safe Retirement Income

October 13, 2018 by Tim Barton Leave a Comment

She Solved Her Retirement Needs. And So Can You

Need retirement income you can’t outlive? Have coffee with Meg. Take a video break and learn how Meg uses a single premium immediate annuity (SPIA) to alleviate concerns about outliving her retirement assets and being unable to meet monthly expenses.

Retire with Confidence

People are living longer than ever before, meaning that unpredictable market performance, higher health care costs, and rising inflation could impact your retirement nest egg. Social Security is in question, and you may or may not have a pension.
The reality is, many individuals may not be able to maintain their standard of living — or worse — may run out of money during retirement.

Live Comfortably with Retirement Income- Consider the risks that can affect your retirement and life:

Lifespan – Living longer and outliving your retirement money.
Inflation – Cost of living increases that erode your retirement buying power.
Fluctuation – Market volatility that impacts your retirement assets.
Experience – Life events that require retirement plan flexibility.

At what rate can you safely withdraw from your portfolio to address these risks?

According to the Journal of Financial Planning, the safe withdrawal is 2.52%.

Contact www.TimBarton.net

June 6, 2016 by Tim Barton 6 Comments

How to Find Lost Life Insurance & Annuity Policies

Some times life insurance policyholders forget to inform their beneficiaries that they have taken out life insurance that lists them as beneficiary. At other times the primary beneficiary knows about the life insurance policy but the contingent beneficiaries are not informed. Should there be an accident that kills the policyholder and primary beneficiary such as an auto crash involving husband and wife. The contingent beneficiaries are left in the dark about the existence of the policy.

Filing a claim is the beneficiary’s responsibility. Due to the lack of knowledge about the in force insurance beneficiaries leave millions of dollars in life insurance proceeds unclaimed. Insurance companies want to pay these claims that are rightfully due. If the claims are never filed eventually the funds of the policy reverts to insured’s home state’s lost property account.

There is no statewide database of insurance policies so the beneficiaries are on their own.

Check deceased’s

Safety Deposit Box
Financial Records for any payments made to an insurance company
Address Book for adviser, insurance agent, accountant or planner.

You can view a short video by the Insurance Information Institute here. http://www.incomesafety.com/?p=369

You may ask questions in the comments or contact me privately Tim Barton, ChFC

February 17, 2016 by Tim Barton Leave a Comment

Confirmed; Annuity Owners More Confident To Retire

The following IRI survey comes as no surprise to retirement income planners who witnessed their annuity client’s relief and security while they heard stories of large losses from their friends and associates in the aftermath of 2008’s financial meltdown. Not only did these clients not lose any money or income; they experienced strong growth as the market indexes slowly recovered.

Insured Retirement Institute survey, by IALC

According to a recent survey by the Insured Retirement Institute (IRI) of Americans aged 50-66, a majority (53%) of annuity owners are extremely or very confident that they will have adequate income in retirement, compared to less than a third (31%) of non-annuity owners who say the same.

And not only are these consumers more confident, they are also satisfied with their annuity purchases. A recent LIMRA study found that 83% of fixed indexed annuity buyers reported being satisfied with their annuities and five in six would recommend annuities to others.

So what’s driving people to buy fixed annuities, in particular? Certainly the 2008 crash taught consumers that their foundations are not as sturdy as they once thought. So in order to regain a sense of stability they are looking for sources that provide some minimum guaranteed income. In fact, when asked about the intended uses for indexed annuities in another recent LIMRA survey, respondents’ top three responses involved retirement planning, including supplementing Social Security or pension income, accumulating assets for retirement, and receiving guaranteed lifetime income.

For help you may ask questions in the comments

Or click here to contact me privately: Tim Barton Chartered Financial Consultant

January 12, 2016 by Tim Barton 35 Comments

Winners of $1.4 Billion Lotto: What now? How to get your money?

Once the initial euphoria wears down and you are “Snoopy Danced” out. Sorry I have no idea how long that takes. The moment will come when you have to make some decisions about how to receive your lottery winnings.

Everyone seems to assume the winner or winners, (yes brace yourself you are likely going to have share the jackpot with other winners) will take the jackpot as a lump sum. The biggest winner of all is government at all levels. Each state involved gets a cut of the ticket sales and the state or states where the jackpot winners live get to tax the jackpot. Yesterday State Senator Tim Carpenter (D) WI put out a press release about his plans for spending the estimated $65,790,000 tax windfall if a Wisconsin resident won the $1.4 billion. This windfall of state income tax pales in comparison to federal tax take at 39.6% ($343,728,000).

If the winner is a Wisconsin resident who decides to take the estimated lump sum payout $868,000,000 they would realize a net after tax payment of $458 million ($458,482,000.) This is only 33% of the $1.4 Billion. That’s right if a winner takes the jackpot in a lump sum they only get a check for 33% of the winnings. Of course that is still a life changing amount of money.

Almost all financial advisors, lawyers, accountants, bankers and other investment advisors tell the winner to take the lump sum because they will quickly make back the annuity reduction and tax bite. A client with $458 million is big in the financial and legal industry. Inside they are referred to as whales or elephants. So it’s hard for many advisors to tell this potential client to take the larger $1.4 Billion as an annuity payment over 30 years.

Annual annuity payment is about $46.7 million ($46,666,666) State and federal tax each year is $22,049,999 this nets the winner $24.6 million ($24,616,667) after taxes each year for 30 years. That is a seriously nice income payment which would leave a substantial amount to invest each year after all the celebratory spending. Best of all the winner will receive a total $738,500,000 compared to $$458 million net lump sum.

Advantages of annuity payments

Minimize taxes
Guarantees $24.6 million income for 30 years
No investment risk, all investments come with the risk of loss.
Helps prevent fraud
Spend thrift tendencies will not wipe out winnings in one year

One of the biggest arguments against an annuity is “your money is tied up.” Wrong. Not these days. There are investor groups who buy annuities. They compete against each other because an annuity income is valuable. If a winner changes their mind later and wants a lump sum for whatever reason they can sell the annuity payments to the highest bidder. In the current economic conditions this would net the winner about 15-20% more than taking the lump sum payment immediately from the Powerball lottery.

A winner has 180 days to claim the Powerball before their ticket expires. Winner has 60 days from the date of their ticket claim to chose the lump sum. Then the annuity payment is mandatory and there is no changing that from the lottery. Historically only a handful of winners take the annuity option leaving a pile of cash on the table. If many of these had waited 61 days they could have sold their annuity and had more money in their account.

How to stay anonymous:

Good luck with that. These days it’s impossible to keep secrets. Thanks to the internet and other technology society gets more and more transparent everyday. So even in the handful of states have laws to allow jackpot winners to stay anonymous they’ll be found out. Most states require winners to go public.

Changing your name to claim the prize and then changing back again will not work. All states forbid changing a name when fraud is intended. If a state requires disclosure of the winner and they change their name… Sure looks like a fraud. No reason to go there. Many states require name changes be published in the local newspapers for a period of time. Where are newspapers published these days? Online.

No hope of anonymity so it’s best to make plans to deal with your rock stardom should fate see fit to pick you. And that will be the topic of a future post.