Variable Annuities with Lifetime Income Riders
My last blog post of 2011 – The Great Annuity Paradox – featured a discussion of the changing perceptions of variable annuity contracts and the odd state of affairs in the annuity marketplace. The post generated a fair amount of client discussion, so, to follow up, I thought some folks might be interested in following the transformation in perception and reality that is taking place in the annuity marketplace first hand. Below are a handful of articles from the popular press over the past few years that echo the tale recounted in the Great Annuity Paradox.
- John Hancock latest to yank annuity offerings, pare distribution, Investment News, November 20, 2011.
- The Annuity Puzzle, The New York Times, June 4, 2011.
- Getting Smart About Annuities, Wall Street Journal April 18, 2009.
- Bargain-buyers: Beware – New research suggests variable annuities may be dangerously underpriced, MarketWatch, January 4, 2007.
Readers should be advised that I am providing this information because I believe it is of general topical interest. While I do regard variable annuities with lifetime income benefit riders as a potential solution for managing serial returns risk (the risk of major stock market declines early in retirement), annuities are certainly not suitable for all investors, and nothing in this communication should be construed as a solicitation or recommendation to purchase variable annuity contracts. Investors should also be aware that variable annuity contracts are complex instruments that are sold by prospectus. Investors who are considering such investments are advised to carefully read and understand the risks, limitations, and expenses as outlined in the prospectus prior to investing.
Comments and questions are always welcome.
National Financial Services, LLC [NFS], member NYSE/SIPC, a Fidelity Investments® company, serves as custodian for client assets and provides clearing and trade execution for client accounts. Securities and Investment Advisory Services are offered through Financial Advisers of America, LLC, a SEC Investment Advisor and member FINRA/SIPC. Separate investment advisory services, including flat fee and hourly fee financial planning, are offered through Financial Planning Hawaii Inc., a Registered Investment Advisor. Financial Advisers of America, LLC is not affiliated with Financial Planning Hawaii Inc.