Annuities Not Understood

02/06/2014

I often refer to options as the orphaned investment because they are not brokers understand why they are not promoted. They are misunderstood by many who think they know everything about them. Fact of the matter who talk badly about them, they probably have never traded.

Same ideals for annuities. Very misunderstood by misinformed individuals the myths continue. This is not the place to go. In the myths You can conjure your own place, this is a time to establish fact from fiction.

Most retirees end up owning annuities. They think they do, but in fact they do. Once you are done with this report, you realize that there are more than you think in annuities.

Social Security terrible though walking is an annuity. So everyone who receives social security is one of the largest annuity. Lottery winners if they do not take off a lump some take an annuity. Most pensions and state pension systems use payments in annuities.

So now we know the majority of pensioners without them realizing it in annuities, why do not we discuss what they are.

Annuities have two components.

1) The accumulation phase is where you put in an account for later use your money. 401k, IRA, etc. although not technically as annuities, they can be used for the accumulation phase. Annuities can and do accumulate tax deferred. And there’s no limit to how much you can put up with after tax dollars.

2) Phase annuities or more commonly referred to as the annuity contracts. This is the distribution phase in which the annuitant receives payments.

Once you can not change it. Your first payment of SS or a pension or annuity, Why? Since the calculations are based on actuarial numbers. For those who do not understand, it simply means that the average person will live for X years. Based on how much is in your accumulation account and how long you expect to live and how much return on the money, you get a check for that amount. During the set time or set

Now of course I have it much easier than what complexity are made to it.

The key point is that no one knows exactly how long they will live. If you happen to live longer than you had, you would have no money? If your investments went south for five years in a bear market you would be enough to receive payments, or would it run?

I mainly invest in options and have more than 20 years. However, it would be irresponsible for me to make this type of investment to accommodate the elderly without them understanding. Fully the risks

What the elderly need is a fixed amount that they can count on no matter what. Then excess can and should be used to adjust the loss of purchasing power over the years.

If retirees try to guess how much they can take each month to spend and do wrong (like in 5 years bear market, live longer then needed, etc.) can be very harmful in the later years. If the fear is too large to survive investment, among many try guessing so that less provide monthly income for many years. Even if they do not live the age they are supposed to.

For younger workers, the need to accumulate should be appropriate. But for retirees who have no other source of income than what they have saved (yes Social security included) they gamble at best the outcome. If they are good, they do not gamble, if they win it’s a miserable golden years.

The business of investing can be like basketball: The game can turn on a dime To be truly successful, you have to know how to get the ball — and more importantly, how to anticipate the ball That’s what separates the ordinary player. the great player

With over 28 years of experience, both as a consultant [3 (commodities broker) 6 (mutual funds) 7 (stocks, bonds, options) life and health insurance] Participation in most forms of investment. From taking companies public speculation.

Educating investors is simple. The web has many sites to disclose full information. In the information age, there is certainly no shortage of information. Teaching investors to be successful is much more difficult today that it has ever been. Do not mix any information successfully. With too much information is too much error.

It sounds like a contradiction, but in reality, the educated end up talking heads. The successful investors quiet living next door.

As an investor, advisor, etc. It is my greatest pleasure to see others understand what level of success they are looking for.