Retirement Income Planning

What is an Annuity?

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What is an Annuity

When it comes to financial planning and insurance products the annuity is traditionally regarded as the product that disperses or liquidates a sum of money.  Long known for their reputation as the safe product used for creating guaranteed income streams.

Annuities have evolved as much (if not more) than life insurance contracts over the past 100 years and their use in practice has dramatically shifted to more closely complement modern day financial planning.

Does an annuity belong in your portfolio?  I don't want to make a blanket statement, but rather equip people with the knowledge to be able to reasonably think either they should or shouldn't entertain this idea further.

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What’s The Problem With My Pension?

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What’s The Problem With My Pension

For the past few decades, a big part of the American Dream was to go to college, get a great job with a big company, work there for forty years and then spend your days cruising around in your golf cart in some place like Boca Raton, Scottsdale or Palm Desert.

Of course this whole “fantasy” (that’s arguable in my opinion) was possible because almost all retirees were covered by a traditional pension plan.

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7702 Plan: Always a Bad Idea or Simply Misunderstood?

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what is a 7702 plan?

Several years ago (the details as to exactly when are a little hazy), someone somewhere within the insurance industry made a fascinating discovery, which gave way to something referred to as a 7702 plan.

What might this fascinating discovery be? A tax loophole? The introduction to a new financial product that would bring salvation to us all?

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How Come People aren’t Laying Dead in the Streets? Retirement for the Baby Boomers

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How Come People aren’t Laying Dead in the Streets

If you've spent any time reading the financial press you'll likely notice that Americans are chronic under-savers and this spells bad news for retirement.  In fact, it turns out we're so bad we recently reviewed a lot of the ideals Alan Greenspan championed and it turns out he might not have been exactly right (or at least that's the current preveiling theory, I've always believed he's sharply sarcastic and often made subtle jokes while addressing Congress that went over most people's heads).  If you want “proof” that we're meandering up the creek without a paddle check here:

 43% have less than $10k for retirement 

The Great Risk Shift

Retirement Crisis Closes In On Baby Boomers 

Solving a Looming U.S. Retirement Crisis

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Why Stock Market Returns Matter, But Not for the Reasons You Probably Thought

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Why Stock Market Returns Matter, But Not for the Reasons You Probably Thought

I've been known to quote stock market returns from a Compound Annual Growth Rate (geometric mean) point of view.  This calculation takes into account the effect time has on a rate of return and is wildly more useful than simply looking at average rate of return (usually quoted as the arithmetic mean).

But any good hardcore day trader or even the wannabe home gamers in the investment world should quickly ask a disarming question: “so what?”  So the markets have traditionally failed miserably to consistently post a year over year positive return over the course of the past decade.  There are still people who make money investing in equities, even your precious insurance companies.

And you know what?  They are correct. 

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The Methodology Behind “Average” Rate of Return

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The Methodology Behind Average Rate of Return

When someone quotes the rate of return on a specific investment or quotes average returns on an index to support a theory behind achieving similar results in their investment, do you actually know what exactly they are talking about?  Further more, what is the probability that you will in fact end up with what everyone else is quoting as “average?”  The old joking definition of Statistics is: generally everyone; specifically no one.  And this seems to be  pretty fitting for a novice skill level in probability and statistics.  However, once we get a little more technical, and employ a few more mathematical techniques, we start to explore what purpose these numbers really serve.  We'll explore some useful applications of these figures in this post.

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Looking for some Good Ideas for your Emergency Fund? Part 1: Cash Value Life Insurance?

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Cash Value Life Insurance as an Asset Class

In the spirit of the Holiday Season, which just wound down for the most part (hurray I can drive by major commercial locations again!), I figured I'd make today's piece a sort of “holiday gift ideas with cash value life insurance that kick ass” type post.  For years I've been advocating what I'm about to roll out here, and I've got clients who have accomplished some seriously nice cash positions that are crushing what others are traditionally taught to do with their emergency fund money on a rate of return playing field.

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An Oldie, but Goodie

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An Oldie, but Goodie

I remember quite vividly the first time I saw this video.  I was still a career agent with one of the big 4 Mutuals and we had a special meeting conducted by the Director of Individual Life Sales.  He came from the Home Office to give us a presentation on the topic of life insurance as an asset class and brought with him this video recorded a few months prior on CNBC.

httpv://www.youtube.com/watch?v=1sskwUTj4z8

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The Chartology They Don’t Really Like Talking About

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The Chartology They Don't Really Like Talking About

Ever flip on over the CNBC and watch their stock picking experts talk about chartology?  It's the process of looking at a graphical depiction of a stock or market performance and making “educated” guesses about where the market (or a particular equity) is going based on the statistical data that represents the chart's graphical display.  It's not perfect, but it's something a lot of Wall Street types get really excited over, and it's probably something you've run into if you've spent more than 10 minutes with a stock broker who wanted to pitch you on his or her latest and greatest stock idea.  Well, here's a chart that most 3rd graders could make a prediction off, and it's not good news for the buy and hold folks.  It's the historical data for the Dow Jone Industry Average, the index of the largest publicly traded companies in America (read: where the “low risk” blue chips call home).

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