2008 October | Annuities

Archive for October, 2008

Market Value Adjusted Annuities

In the last 25 years, interest rates on retirement savings have fluctuated from 14% to less than 4%, and no one can really be sure what the future holds (you can get estimates using the annuity calculator). Sometimes this makes finding an investment that pays a steady income (which adjusts for rising and falling interest rates) a difficult chore. One method is to select investments with various maturity dates to lock in your money over a range of interest rates. This is typically done by laddering bonds. Long-term fixed investments usually pay a higher rate than short-term ones. However, as interest rates go up, it could be costly to liquidate long-term investments and reinvest the money at newer, higher rates. So how can you keep up with the best yields available while protecting your income against rate decreases? Market value adjusted annuities (MVAA) are fixed annuities that let you lock in interest rates for several terms that can range from one to 10 years. At the end of each term, the annuity company will present a new interest rate and offer you an opportunity to withdraw your money without surrender charges. But what if you wanted the money [...]

Annuity Table

While buying annuities, an investor should always check the annuity table. Annuity tables give a clear picture of how much annuity an investor can expect from the annuity provider after a certain number of years. As we know, annuities are investment instruments which are used by investors to secure their financial future after they retire. They are very important instruments and can either make or break an investor’s future after retirement. Let us see how we can best use annuity tables. These tables give graphical and tabular representation of returns based upon various factors such as demographics, amount of money to be invested and the expected return. There are various payment options that are offered by insurance companies and using an annuity table an investor can find out how much exactly one can earn in the different payment methods. It should be noted that an annuity table may not give the exact figure of how much return that one can expect from a product, but it will certainly help to form a rough idea and help the investor in taking a prudent investment decision. The annuity table that an investor uses should be current. An old version of an annuity [...]