Annuities

Annuity Moves Efficient Frontier

An Annuity lowers portfolio volatility thereby improving the risk/return profile of the Efficient Frontier. The Efficient Frontier (EF) is the envelop of optimal portfolios that provide the best risk-reward tradeoffs. A more detailed view is presented in our blog “Efficient Frontier and Diversification.” Adding an Annuity to a portfolio moves the EF to the left …

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Annuity Policy Design Considerations

The key factors in selecting a deferred FIA as part of a tax optimized retirement plan. We will here review the key considerations in putting together a deferred FIA (Fixed Index Annuity) targeted at providing tax-free inflation-adjusted lifetime retirement income. A variety of high-performing index strategies exist: S&P 500 is probably oversubscribed and hence carries …

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Annuity Benefits

An Annuity works best when bought within a Roth account where it can provide a lifetime of inflation-adjusted tax-free income. Fixed Index Annuity (FIA) benefits can be divided into four categories: Asset Growth, Asset Safety and Access, Tax Benefits, and Insurance Protection. Asset Growth: With an Annuity, you can beat the longevity risk (explained further …

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Longevity Risk

Planning for a shorter life expectancy risks outliving one’s savings. Planning for a longer life expectancy may mean spending less during retirement and leaving behind a larger than intended legacy. An Annuity can help mitigate both types of risk. The longevity risk is the risk of outliving one’s life savings. Life expectancy in the U.S. …

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