Comments on: Click to Ask a question >> http://www.theretirementpros.com/blog/2007/12/ask-the-experts/ Retirement Planning Blog Topics: Social Security, Investments, Safe Money advisory, Retirement Video Seminars Fri, 23 Dec 2011 05:50:30 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: DrShelby http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-772 DrShelby Thu, 20 Oct 2011 15:37:15 +0000 http://www.theretirementpros.com/blog/?p=8#comment-772 It is my understanding that in the UK retirees must put a certain portion of their retirement money in annuities so they are guaranteed a lifetime income. It is my understanding that in the UK retirees must put a certain portion of their retirement money in annuities so they are guaranteed a lifetime income.

]]> By: Annuities http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-768 Annuities Fri, 14 Oct 2011 16:50:25 +0000 http://www.theretirementpros.com/blog/?p=8#comment-768 How popular are annuities in the UK to the US? In the UK the are the most popular retirement income product? How popular are annuities in the UK to the US? In the UK the are the most popular retirement income product?

]]> By: DrShelby http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-723 DrShelby Fri, 27 May 2011 20:04:47 +0000 http://www.theretirementpros.com/blog/?p=8#comment-723 First of all, I do not comment on individual products because there are simply too many of them and I cannot devote the resources to be expert on all. That said, please know that a Variable Annuity is a product offered by an insurance company (ING and Lincoln are both insurance carriers) BUT the underlying assets are mutual funds. The fees on VAs are generally higher than mutual funds because they offer benefits not offered by mutual funds, e.g., tax deferral (you do not need since the 457 is already tax-deferred), a guaranteed earnings rate IF you later convert the account balance to a guaranteed lifetime income and possibly a death benefit that is the highest account value during your ownership. The 5% guaranteed annual rate you mentioned is most like available ONLY IF you later convert your money into a lifetime income. The VA accumulation account (as opposed to the income account which will be the greater of the 5% growth or the account value) will be the value of the underlying mutual funds (generally called sub-accounts) less any fees and charges (you’ll find these in the rather large Prospectus which you will agree that you read and understood prior to putting your money in the VA). Don’t be surprised if the Prospectus fails to put all the charges in one place so they can be readily identified. Bear in mind if you do not later take a lifetime income, your VA account value will gain or lose based on the underlying value of the mutual funds – in other words there is risk UNLESS you elect to take the lifetime income option that has the 5% guaranteed annual rate. You’ll want to find out how many years the 5% annual rate is guaranteed and if it can change at the option of the insurance company. As a general rule I would never advise someone to put their hard earned retirement money into something they did not fully understand. If you have other questions, let me hear from you. First of all, I do not comment on individual products because there are simply too many of them and I cannot devote the resources to be expert on all. That said, please know that a Variable Annuity is a product offered by an insurance company (ING and Lincoln are both insurance carriers) BUT the underlying assets are mutual funds. The fees on VAs are generally higher than mutual funds because they offer benefits not offered by mutual funds, e.g., tax deferral (you do not need since the 457 is already tax-deferred), a guaranteed earnings rate IF you later convert the account balance to a guaranteed lifetime income and possibly a death benefit that is the highest account value during your ownership. The 5% guaranteed annual rate you mentioned is most like available ONLY IF you later convert your money into a lifetime income. The VA accumulation account (as opposed to the income account which will be the greater of the 5% growth or the account value) will be the value of the underlying mutual funds (generally called sub-accounts) less any fees and charges (you’ll find these in the rather large Prospectus which you will agree that you read and understood prior to putting your money in the VA). Don’t be surprised if the Prospectus fails to put all the charges in one place so they can be readily identified. Bear in mind if you do not later take a lifetime income, your VA account value will gain or lose based on the underlying value of the mutual funds – in other words there is risk UNLESS you elect to take the lifetime income option that has the 5% guaranteed annual rate. You’ll want to find out how many years the 5% annual rate is guaranteed and if it can change at the option of the insurance company.

As a general rule I would never advise someone to put their hard earned retirement money into something they did not fully understand. If you have other questions, let me hear from you.

]]> By: DrShelby http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-673 DrShelby Tue, 21 Dec 2010 19:47:49 +0000 http://www.theretirementpros.com/blog/?p=8#comment-673 Glenn, Without a lot more knowledge about you and what you're trying to accomplish, we do not have an answer for your question. As a starter we would recommend you find and work with a qualified financial professional -- not one that only offers "market" solutions but also can talk to you about estate planning, tax-deferral, Roth IRA conversion, insurance products, trusts, etc. Good luck. Glenn,

Without a lot more knowledge about you and what you’re trying to accomplish, we do not have an answer for your question. As a starter we would recommend you find and work with a qualified financial professional — not one that only offers “market” solutions but also can talk to you about estate planning, tax-deferral, Roth IRA conversion, insurance products, trusts, etc. Good luck.

]]> By: DrShelby http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-671 DrShelby Mon, 13 Dec 2010 15:31:34 +0000 http://www.theretirementpros.com/blog/?p=8#comment-671 Dear Janice, First of all never invest in anything you do not understand. If it sounds good, learn more before you commit. You do not pay federal income taxes on municipal bonds – so you should compare the after-tax return on other fixed-rate investments to the coupon rate (interest) on your municipal. Without knowing your tax situation, I have no way of knowing if municipal bonds are suitable. Also, there are other things about municipal bonds you need to consider: (a) is there a secondary market for them [if you decide to sell, can do you so without facing a large spread between the bid and ask]? (b) do they have call features? (c) what is the credit rating, and credit rating outlook, of issuer [currently some municipal bond issuers are having budget issues that will affect ratings]? (d) Do you plan to hold to maturity or might you sell before? [If interest rates rise and your bonds have fixed rates, their value will fall]. (e) What do you plan to eventually do with the money you’ll invest in municipal bonds? Generally municipal bonds are suitable for investors in high tax brackets, who can afford to take some risk and have a longer term horizon. Does your financial advisor offer only securities or all savings/investment/insurance products? Thanks for visiting the blog. Dear Janice,

First of all never invest in anything you do not understand. If it sounds good, learn more before you commit. You do not pay federal income taxes on municipal bonds – so you should compare the after-tax return on other fixed-rate investments to the coupon rate (interest) on your municipal. Without knowing your tax situation, I have no way of knowing if municipal bonds are suitable. Also, there are other things about municipal bonds you need to consider: (a) is there a secondary market for them [if you decide to sell, can do you so without facing a large spread between the bid and ask]? (b) do they have call features? (c) what is the credit rating, and credit rating outlook, of issuer [currently some municipal bond issuers are having budget issues that will affect ratings]? (d) Do you plan to hold to maturity or might you sell before? [If interest rates rise and your bonds have fixed rates, their value will fall]. (e) What do you plan to eventually do with the money you’ll invest in municipal bonds? Generally municipal bonds are suitable for investors in high tax brackets, who can afford to take some risk and have a longer term horizon. Does your financial advisor offer only securities or all savings/investment/insurance products? Thanks for visiting the blog.

]]> By: Glenn Angelo http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-670 Glenn Angelo Sat, 11 Dec 2010 23:21:28 +0000 http://www.theretirementpros.com/blog/?p=8#comment-670 How can one best invest in a socially responsile and tax-efficient manner after retirement? How can one best invest in a socially responsile and tax-efficient manner after retirement?

]]> By: Janice Coniglio http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-645 Janice Coniglio Sun, 07 Nov 2010 13:39:47 +0000 http://www.theretirementpros.com/blog/?p=8#comment-645 I am not sure how to ask a question. My husband and I are of retirement age and find your blog very informative. I do have one question: Should we put monthly incremental deposits in a tax free municipal bond fund as a haven for money. This was recommended to me by our financial advisor, but I don't know enough about them. This would be after tax money, Thank you, Janice I am not sure how to ask a question. My husband and I are of retirement age and find your blog very informative. I do have one question: Should we put monthly incremental deposits in a tax free municipal bond fund as a haven for money. This was recommended to me by our financial advisor, but I don’t know enough about them. This would be after tax money,
Thank you,
Janice

]]> By: Brian http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-644 Brian Mon, 01 Nov 2010 15:25:25 +0000 http://www.theretirementpros.com/blog/?p=8#comment-644 I have a question concerning a variable annuity, and hope you can help. I currently participate in a deferred compensation 457 plan . My money is currently being invested with ING, but a rep from Lincoln Financial met with us to introduce his options. Within this 457 plan he offers a product called the Choice Plus Assurance Variable Annuity. Everything I have ever heard or learned says STAY AWAY from these products. I am confused as to how this product works within the 457 plan. I asked him if the principle was mine when I retired (under 59 1/2 because I'm in a 457), and he said yes, all the rules of the 457 apply. He talks about a guaranteed 5% annual interest, and a lot of other confusing things. Can you offer some insight on this product offered by Lincoln Financial. There are many of the employees here that are buying into it, and I'm pretty sure this is something to stay away from I have a question concerning a variable annuity, and hope you can help. I currently participate in a deferred compensation 457 plan . My money is currently being invested with ING, but a rep from Lincoln Financial met with us to introduce his options. Within this 457 plan he offers a product called the Choice Plus Assurance Variable Annuity.
Everything I have ever heard or learned says STAY AWAY from these products. I am confused as to how this product works within the 457 plan. I asked him if the principle was mine when I retired (under 59 1/2 because I’m in a 457), and he said yes, all the rules of the 457 apply. He talks about a guaranteed 5% annual interest, and a lot of other confusing things.
Can you offer some insight on this product offered by Lincoln Financial. There are many of the employees here that are buying into it, and I’m pretty sure this is something to stay away from

]]> By: Cathy http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-624 Cathy Thu, 10 Jun 2010 19:54:58 +0000 http://www.theretirementpros.com/blog/?p=8#comment-624 My fiance is retired but not yet 62. He will be collecting Social Security starting next year. I have another 15 years to continue to work and am contributing to a 401K through my employer plan. My concern is how can I protect my retirement savings if we get married and then my partner suffers a catastrophic illness? We are actually delaying wedding plans due to this concern. My fiance is retired but not yet 62. He will be collecting Social Security starting next year. I have another 15 years to continue to work and am contributing to a 401K through my employer plan. My concern is how can I protect my retirement savings if we get married and then my partner suffers a catastrophic illness? We are actually delaying wedding plans due to this concern.

]]> By: robert http://www.theretirementpros.com/blog/2007/12/ask-the-experts/comment-page-1/#comment-617 robert Thu, 29 Apr 2010 17:39:31 +0000 http://www.theretirementpros.com/blog/?p=8#comment-617 my mother is 77yrs old and is in pretty goodd financial shape. She has $50,000 in savings, $20,000 in checking and around $70,000 in annuities. She places her monthly annuity money into her savings account because she doesnt need to use it as income. Is there a better option for her than annuities? my mother is 77yrs old and is in pretty goodd financial shape. She has $50,000 in savings, $20,000 in checking and around $70,000 in annuities. She places her monthly annuity money into her savings account because she doesnt need to use it as income. Is there a better option for her than annuities?

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