Annuity Planning Article on Retirement Savings

Annuity Planning Company Article on Retirement Savings.

The Original Link is here

http://www.bhcmarketing.com/free/

If you live in the Houston Metro Area, and would like more information on annuities, you can email me: myfreeforum @ yahoo.com (Take out the spaces in the email address - I do this to prevent SPAM). I will keep your information confidential and be happy to give you free information on the benefits of annuities for retirement planning at any age!

For Immediate Release
Houston, Texas



A successful retirement doesn’t just happen; you’ve got to plan for it. Preferably, your retirement planning has started, but it’s never too late to start. The long ramp toward retirement focuses on saving and investing, but once retirement starts emphasis shifts to spending and safeguarding. Even though the greatest challenge in retirement, and probably your greatest fear, is outliving your money, most Americans spend less time planning their retirement than they do planning a vacation.

What does retirement planning involve? Here are the steps: First, determine what you’d ideally like to do in retirement, and then discuss it with your spouse and other loved ones. Will you spend your time traveling, enjoying hobbies, helping others, working part-time, or what? Second, estimate the retirement income you’ll have from savings, Social Security, pension [if you’re lucky], and all other sources. Third, estimate your expenses making sure to take account of inflation, taxes and health care costs which are likely to be an increasing part of your budget.

Steps two and three should be done for each five-year period of your retirement and then revised annually. Fourth, if you have more income than needed, you only need to safeguard your investments to make sure they’re not lost or shrunk by bad decisions. If you have insufficient money for retirement (expenses exceed income), then you’ll need to postpone retirement, work part-time or possibly use a Reverse Mortgage to access the equity in your home. Either way, it is highly recommended that you minimize your exposure to loss and maximize the full potential of your financial resources by working with a financial advisor. They can help you determine the risk you can afford, investment options and how to position your money for best results without sacrificing safety. Don’t worry about having too little to justify a financial advisor or so much that you can ignore risk: retirement is going to be very long, filled with uncertainties, including emergencies, and going it alone is one of the greatest risks you can take.

Be realistic in your planning. For example, be aware that for a couple age 65 there is a 50% probability that one will live beyond age 90. Acknowledge that even a low rate of inflation can make a big difference in prices over the 20 to 30 years you’ll be in retirement. For example, average inflation of 3% means $1 today will be worth only 55 cents in 20 years and 41 cents in 30 years. Since 78 million boomers are entering retirement over the next two decades, the price of everything related to retirement, especially health care, is likely to rise faster than overall inflation. Inflation is a cruel tax for those on fixed incomes, and chances are your income in retirement will increase a lot slower than prices.

The boomer explosion is going to overwhelm government-provided services and benefits. This means that the relative benefits of Social Security and Medicare are going to shrink under the pressure of increased retirees. There will simply be more people receiving entitlement benefits than workers paying the bills. Every study, government and private, indicates there will be a shortage of money to support these programs. To pay for this shortfall, the government must raise taxes of all types - income (even on Social Security benefits), real estate, sales, estate, etc. The increased taxes, inflation, relative decrease of benefits combined with escalating medical care costs will be especially burdensome for those in retirement without rising incomes from wages and salaries.

If you haven’t evaluated it yet, investigate the risk you’re taking with your retirement money. Would you have a loss if the stock market lost ground? You might if your money is still in your ex-employers 401(k) plan, or if you own securities, even mutual funds, whose value is determined by the “market”. Generally, investments in stock have done well “long term”, but you may need your money before a “long time”. From November 1973 to October 1974, the S&P stock market index fell 48%, and it took over six years to recover. The last bust in the stock market was 2000 - 2002, and we’ve yet to fully recover. In the meantime, inflation marches forward with the shrinking dollar purchasing less. Much of your income in retirement is likely to be derived from your “savings and investments”, and you simply can’t afford risk of loss and the compounding of inflation. Think of retirement as the largest purchase you’ll ever make, and you can’t borrow the money to pay for it. If you lose some or all of your retirement money to bad investments, you’ll increase dramatically your chances of realizing your greatest fear: outliving your money.

How do you safeguard against the challenge of too many years and not enough money? Short of devoting your leisure time to managing your investments, you’ll need to rely on a financial advisor to show you how to build a tax-efficient income stream you can’t outlive. With help, you’ll take advantage of the triple compounding of tax-deferral to get safe growth for the money to be used years from now, and you’ll “ladder” your retirement money into an income you can’t outlive with your “next up” money readily available and in no danger of principal loss. While this may seem a daunting task, it’s easy for a financial planner that knows the options, understands risk and has experience in matching financial resources to remaining life expectancy. Like law and medicine, financial planning is best left to professionals. Your job in retirement is to enjoy life free of investment worries.

Shelby J. Smith, Ph.D.
October 2006

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Who should consider buying an annuity?
October 19th, 2006
I posted an annuity primer a few days ago, but that was just to get our feet wet. Now I want ot work on reasons that individuals may buy an annuity. This post will still have to be fairly general, as you need to work out specifics for your own situation. Consider risk, cash value, taxes, and leaving money after death when you think about annuities.

I think that two sorts of people tend to look at annuities. The most common type are people at or nearing retirement who may have a chunk of savings they want to invest wisely. Some annuities can provide a guaranteed life income which can provide security for people in their retirement years. Another growing group of annuity investors are younger people, planning for their retirement in the distant future.

For retirees considering an immediate annuity, you have tax favored withdrawals. After age 59 1/2 you can withdraw money without a tax penalty. If you choose a life settlement, you can stretch out the ‘gains’ portion of your investment over a longer period, which should decrease your tax bill.

For younger investors, you have tax deferred accumulation. If you don’t have to pay a tax bill on gains every year, you will increase the cash value of your investment quicker. Besides, many indexed annuities have a track record of paying far above CD interest rates. Add in a guaranteed minimum, and you have a safe investment with the potential for high rewards!

One other consideration is the beneficiaries of an annuity can inherit without probate. In that way, annuities combine an investment contract with an insurance contract.

If you are interested in an annuity, you can find nationwide annuitiy information with this link!

If you are in Texas, contact me here to learn what options are available for you!




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Individual and Family Dental Plans
October 19th, 2006
I am surprised, but next to health insurance, dental insurance or dental plans are the thing that newly non-group covered people ask me about. Now I think I just made up the word, non-group covered. But you know, it means those of us who are self employed, contract workers, professionals, etc. that do not belong to a company with a group major medical plan, and so we must seek out such coverage for ourselves.

If you are looking for a dental discount plan that includes a Dental PPO (called a DPO, I GUESS) that has pre-negotiated premiums, a large list of participating dentists in your area, sometimes offers free or very cheap routine care services, and may also include vision benefits and other goodies, I have a suggestion. Why not go to one website where you can do a search in your zip code to see all of the plans that are available?

CLICK HERE FOR DENTAL PLANS IN YOUR AREA - YOU CAN ALSO SEE WHICH DENTISTS ARE AFFILIATED WITH THE DENTAL PLANS, AND EXACTLY WHAT YOU GET WITH THE PLAN.

If a dental plan is not what you want, but you need dental insurance, then of course I can point you there too!

Here is the Link to a Search for Dental Insurance for Individuals, Families, and Small Businesses in your area.

What is the difference between a dental discount plan and a dental insurance plan?

WHO PAYS?

With dental insurance, you pay your premiums, plus any deductibles and copays. The insurance company pays the dentist the rest of the money. With a discount plan, you pay a membership fee (usually lower than insurance), and you pay the dentists for services. Since you belong to the discount plan, the bill should be at the cheaper negotiated rate.

DISCOUNTS AT SELECTED PROVIDERS

With dental insurance, you usually get pre-negotiated rates with members of a network. With a dental discount plan, you get a discount with members of the networks. If this sounds similar, it is because it is similar! Note that dental discount plans are usually fairly inexpensive, and some people use them with a type of dental insurance that’s called an indemnity plan so they can save more money. You may also wish to purchase a dentl discount card if you need treatment for a pre-existing condition that’s not covered, haven’t exhausted a waiting period for major dental work, or have already run out of benefits for the year.

Of course, that last paragraph brings up the point that dental insurance usually does have deductibles, waiting periods, and yearly maximums. When you consider those factors with the higher premiums, a dental discount card may work out well for you.









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Health Insurance Premiums Cost too Much?
October 18th, 2006
I guess I feel the need to post about health insurance a lot, because its the most common thing I deal with. Small business owners, contract workers, and professionals may not have group benefits through work, but still want to make sure they get good health care and that their assets are protected in case of an emergency. For many of us, health insurance is just part of the cost of life!

An increasingly popular way to hold down health insurance costs is with a very high deductible plan that includes a critical illness and accident supplement, plus PPO and association benefits and discounts.

Now if you’re the kind of person who just cannot get past the thought of not having a copay at the doctor’s office, these sorts of plans may not work for you. But if you think about it - how much does that copay feature really save you a year. I’ll bet it doesn’t save you more than a couple of hundred dollars in the course of a year, but it tends to add around 25% to your premium bill each and every month! It doesn’t make sense to pay an extra 100 bucks a month to save 50 bucks every other month, does it?

One example is from American Select. They offer a 10K deductible health plan - the type of health insurance plan designed to protect your assets against a real emergency. You are further buffered by a 10K accident, 10k critical illness , AND association benefits that will save you more money on health benefits and other things.

Here’s how to look for high deductible health plans with accident and illness cash supplements.

IF YOU ARE IN TEXAS YOU CAN DOWNLOAD A BROCHURE, QUOTE OR EVEN BUY AMERICAN SELECT HERE:

IF YOU LIVE IN THE U.S., YOU CAN DO HEALTH QUOTES HERE AND LOOK FOR HIGH DEDUCTIBLE PLANS THAT COME WITH ACCIDENT AND CRITICAL ILLNESS SUPPLEMENTS

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Think about health insurance the right way to keep premiums and costs reasonable.
October 18th, 2006
I think it’s very important that we consider just what all insuance is when we think about health insurance. And yes, I mention health insurance because that’s the topic on the mind of many Americans. Premiums are high, and they rise every year. Of course, they don’t rise in a vacuum. Insurance companies are not in business to lose money. If they have to pay more for claims because costs rise, then that will get passed to you, dear consumer.

But what is insurance? Insurance is risk management. If I could tell you that you would have no more than $750 of health insurance costs next year, then I would tell you to pocket your health insurance premium or to buy some very limited benefit plan that would make a Wal Mart Exec shake his head! LOL.

But I cannot tell you that. I also cannot tell you what you can afford to lose. Only you know that. But for instance, if you have a few thousand dollars in the bank, or at least that much accessible on your credit cards, you should probably choose a higher deductible health plan without an option for doctor copays. When you compare prices, you will be surprised to see how much this reduces the premium.

YOu might also replace some of the risk from a high deductible health plan with a supplemental accident or sickness policy. These are usually fairly inexpensive, and they can provide you with cash benefits in case you get sick or hurt. That money can also be used to keep your home, lights on, etc…besides taking the edge off of medical bills.

I would not advise you to skimp on outpatient benefits. Many popular plans are limiting outpatient benefits to $2500 to $15000. This will be fine for a broken leg or minor emergency treatment, but if you are prescribed a year of chemotherapy, you may find yourself out of insurance benefits in your first month or two!

I am not trying to make your health insurance purchase process more complicated, but rather I am trying to make it more affordable. When you know what you are buying, and when you select essential options, you can hold your premiums down while still making sure you have adequate coverage.

NATIONWIDE HEALTH INSURANCE QUOTES OR FIND A LOCAL HEALTH INSURANCE AGENT.

TEXAS ONLY QUOTE OR BUY ONLINE - MEDICAL INSURANCE, TEMPORARY MEDICAL INSURANCE, OR STUDENT HEALTH INSURANCE

NOTE: You may reprint this article as long as you leave this link back to 24/7 Quote US - Insurance BLOG and any other links in the article.



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What is an annuity, and just what is all the buzz?
October 18th, 2006
Questions about annuities are common from clients, friends, and associates who know I am a life and health insurance agent. This is understandable because the term can have more than one meaning. However this article is meant to be a primer on that type of annuity which is a combination of an investment and an insurance product. Annuities may be purchased from licensed insurance agents and are often promoted by those agents, agencies, insurance companies, or banks.

Of course, you should consult your own financial professional and possibly a tax professional to make sure that the comments in this primer apply to your own particular situation! I am not a tax professional, and laws concerning annuity investments change frequently!

In fact, annuity contracts are sold by insurance companies. Insurance agents or bank employees are appointed to represent those companies. Generally, unlike life insurance, the death benefit of an annuity contract is usually just the value of the cash inside the annuity: i.e. payments + Interest - withdrawels - charges. Life insurance may or may not also have a cash value, but the death benefit usually exceeds that value by a lot. Of course, different kinds of life insurance would be the topic for another article.

Immediate Annuity

An immediate annuity is the type of contract that generates lots of buzz amoung retirees, or those with a sizable amount of cash they’d like to sock away to make payments for future income. These types of annuity contracts can pay out for a specified number of years, until the money runs out, or even be set up to guarantee lifetime payments. It’s sort of like a loan that a purchaser makes to the insurance company. Then the insurance company pays back the loan with pre-determined interest rates or rates fixed to some index like the S&P or Dow Jones.

Deferred Annuity

A deferred annuity is more like a vehicle to accumulate savings, usually for retirement. These can be purchased with a fixed interest rate, a variable interest rate, or one tied to an index. Hence they are called fixed, variable, or equity indexed annuities.

Usually a smaller initial payment is made, and then a series of payments will be made over the span of years to accumulate cash value. The interest on these payments grows tax deferred.

Within the types of deferred annuities, we also have tax qualified and non-tax qualified annuities. Tax qualified annuities work like a 401K where you are allowed to take the amount of the payment off of your income for tax reasons (within IRS limits). Non-tax qualfied annuities mean that you have already paid the taxes on the money. Both types of annuities have advantages. With the tax qualified type, you have an immediate savings on your IRS bill, but with the non-tax qualified type, you don’t have to worry about a big tax bill when you are older.

Other Points about Annuities

Some annuities have a load fee, but many do not. If your are considering the purchase of an annuity, this would be a good thing to check out. Most annuitiy purchasers that I have met do not want to see their cash value decreased on the first day of their investment!

Many annuities guarantee a minimum interest, even if they are variable or equity indexed. This feature can make a very safe investment. Make sure you ask about this.

Make sure the insurance company is highly rated. The safety of your investment depends upon two things: the quality of the insurance company and your state rules for protecting your investment if the insurance company should have financial problems.

Watch surrender charges. Annuities may pay out very well, but they often expect a long term contract. If you choose to break that contract by pulling your money out early, you may be faced with stiff surrender charges. These charges usually decline over a period of years.

Some newer annuities come ‘packaged’ with long term care insurance. These are called long term care annuities, and may allow you to use a portion of the annuity to actually purchase long term care insurance. Almost all annuities will have a feature to waive any surrender charges if you need the money because of illness or long term care.

Again this article is intended to be a simple primer about different types of annuity investments. I plan on writing more about pros and cons in the future, but for now I am just defining some of the language.

You may reprint this article for free as long as you leave in the links back to the original post. This article came from 24/7 Quote US - Insurance BLOG.





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Welcome to the 24/7 Quote US Insurance BLOG!!!
October 17th, 2006
Hey! What website would be complete without it’s own blog? We’ve actually been running a blog called ResearchInsurance for quite awhile, but somehow we felt like we needed to have our own blog on our own website.

24/7Quote US provides current insurance quotes either directly from the insurance company, or through a quality checked insurance quoting service. Examples of quality checking we do would be a Better Business Bureau association, a stated policy policy, and a secure site. Whenever you think about putting your own personal information over the internet - either for insurance or anything - you should think about quality checking like that.

Here’s the link to 24/7 Quote US, and you can find nationwide help for annuities quotes and information there! 24/7 QuoteUs.COM


For Annuity Information, find a pro in your own local area.

If you live in the Houston TX metro area, you can email me for more info!