Tips to Know Before Buying an Annuity Policy

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Annuities may be a useful tool for those who want a steady stream of income throughout their lives. While most annuities include a death benefit, an annuity is almost the opposite of a life insurance policy – annuities offer financial protection against outliving your income.

Tips to Consider Before Buying an Annuity Policy

Annuities may be a useful tool for those who want a steady stream of income throughout their lives. While most annuities include a death benefit, an annuity is almost the opposite of a life insurance policy – annuities offer financial protection against outliving your income.

Buying an annuity can be a complicated decision. Following are a few key considerations for buyers before deciding whether to purchase annuity policies:

* Review all of your other savings plans, pensions or retirement funds to determine whether you need an annuity and whether the annuity you are considering is the right one for you based on your age, financial status, investment objective and risk tolerance. Is there a possibility that you could outlive your assets? Will you keep the annuity long enough so that the charges do not eat up your investment?

* Determine whether you want your investment to be steady and fixed or variable. While variable products offer an opportunity to capitalize on market highs, they also carry additional risk in a downturn.

* Be careful about exchanging one variable product for another. For instance, exchanging a variable annuity for a fixed or equity-indexed product may result in a “surrender charge” and higher annual fees, along with a new period of time during which you cannot withdraw money from your account without substantial surrender charges. Always check the schedule of surrender charges and other fees. They may be higher on the variable annuity with the bonus credit than they were on the annuity you already own.

* Make certain the company from which you are considering buying an annuity product is reputable. A good place to start is to look for the Insurance Marketplace Standards Association logo. Only companies that have proven through extensive outside review that they adhere to IMSA’s stringent Principles and Code of Ethical Market Conduct can display this logo.

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A Money Saving Exercise

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Want to get more for your money? Try this simple money saving exercise.

money saving, saving money, ways to save money

There is a simple money saving exercise that everyone should do at least once in their lives. It is ultimately one of the best ways to save money, because it is not about pinching pennies, but about discovering what you really want and getting it. It is so simple you may hesitate to try it. Just try it. Here it is:

List everything that you have spent money on, are currently spending money on, or might spend money on.

Don’t just read this and think of a few things. Take the time to actually write it all down. Review your bank statements if you have to, in order to remember and include everything.

Now go through the list, and carefully consider each item. Take the most time on the big items – past, present and future possibilities. If your timeshare on the beach is worth half what you paid, costs $1,000 per year in expenses, and is rarely used, you need to learn from that – not to punish yourself, but to have a richer life.

If you think honestly about the number of times you will use that Recreational Vehicle, and the cost, it may be $250 for each day of use. That’s okay if that is worth it to you, but maybe you really would enjoy $100 hotels more. Or maybe you can rent an RV for less overall cost, thus freeing up money for other important goals.

You see, saving money isn’t about sacrifice. We all are aware of the scrooges in life that pinch their pennies, bank the savings, and then do nothing with it. The point should be to save money in one area of life so you can use it in ways that make your whole life richer.

Suppose you notice you’re spending $8 per month on subscriptions to magazine you don’t read, or on insurance for a motorcycle you almost never ride? Cancel the subscriptions or sell the
motorcycle, and what have you lost? Is it a big deal? What will that $8 get you instead?

– Bank it for ten years, and use the $1200 to take a second honeymoon.

– Use it to pay for a day off work once a year, to spend with the kids.

– Invest it, to have an extra $50 per month during your retirement years.

– Buy six good books a year, to learn something new.

– Make banana splits for the family once a month.

– Give $100 per year to a worthy cause.

$8 per month can do a lot if used wisely. Imagine what you could do if you stopped wasting $200 per month. That’s why it is so important to discover what you really want – and what you don’t want. This is one of the most intelligent ways to save money.

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Five Steps to a Comfy Retirement

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Building a comfortable retirement nest egg is easier than you think. Here are five steps to help you build a comfortable retirement.

retirement, financial planning, retirement planning

You’ve probably heard about the Nebraska meatpackers who won the largest lottery jackpot in the United States last week. One winner replied “I’ve been retired for about four days now?when asked what he would do with his winnings. His response did not surprise me; I’m sure my reaction would be similar!

What does surprise me is that many Americans believe that they cannot retire comfortably unless they win the lottery. A survey by the Consumer Federation of America shows that 27% of Americans believe that their best chance to gain $500,000 in their lifetime is to win a sweepstakes or lottery.

Fortunately, building a comfortable retirement nest egg is easier than you think. Here are five steps to help you build a comfortable retirement:

1. Start early! If you started saving $100 a month beginning at age 18, you would have over $500,000 by age 65. The power of compounding is great, and the earlier you start saving, the greater the benefit.

2. Have a plan. The best way to ensure that you will have a comfortable retirement is to plan how much you will need to retire. You can’t reach your destination if you don’t know where you’re going.

3. Participate in company sponsored retirement plans. Many companies offer matching contributions to your 401K or other retirement plan contributions. This is free money ?take it!

4. Invest in a diversified portfolio of stocks and bonds, that fits your goals and risk tolerance. Studies show that your investment return is determined primarily by the allocation of your assets, not the individual investment selections you make.

5. Keep your costs down. Invest in no-load, low cost mutual funds (or other investments). Lowering the expenses in your portfolio by just 1% can equate to 20% more money in your portfolio after 20 years.

Although winning a large lottery certainly can’t hurt, following the steps above should send you well on your way to a comfortable retirement.

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Great Money Saving Tips

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Everyone wants to save money, but no one wants to change his or her lifestyle to do so. Here are a few ways you can still go out and have a good time, but save money while doing so.

money saving tips, save money

Everyone wants to save money, but no one wants to change his or her lifestyle to do so. Many people think that the only way to save is to go without; Give up eating out at restaurants, stop going to the movies, stop shopping, etc. This is not the case! It is very simple to still enjoy going out, as well as save money. You just have to find ways to spend less while going out. Here are some examples:

When going to a restaurant:

?Always use coupons! I can’t stress that enough. There are many ways to find them. The Sunday paper usually has coupons for a few restaurants. Many restaurants send out coupons in the mail hoping to get you to visit them. The Entertainment Book has coupons for many restaurants. The restaurant’s own website might have a coupon that you can print out and bring in. Sometimes you will find coupons in their take-out menu. You will be able to save a few dollars just for taking a few seconds to look for a coupon.

?Share a meal. If you’re going out to dinner, many times you can get away with ordering one main course and an appetizer or salad and sharing them with your partner since the portions are so large. By splitting them, you will save a lot more then if you had each gotten your own meal, plus you will get more of a selection since you’ll get to taste both an appetizer and an entrĂ©e.

When wanting to see a movie:

?If you want to go to the movies, consider going during the day, or in the early evening. These are all considered matinee showings, and you will usually pay about half of the price you would pay at night! It doesn’t sound like that big of a savings, but if you go to the movies just once a month, you can save $54 a year per person. You’ll save even more if you go more often!

?If you want to save even more money, you can rent the movie once it goes to DVD. Many websites will allow you to buy packs of 10 DVD rentals, and you will end up saving anywhere from $0.50-$1.50 per rental! This can really add up. If you rent one movie per week, you can save up to $78 a year! Also keep an eye out for coupons that allow you to rent one and get the second free.

There are many other simple things you can do to save money when going out to enjoy different forms of entertainment. For other tips like the ones you just read, see the website below.

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Women Fear They’ll Have Little Gold in Their Golden Years

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Nearly 40 percent of women aged 30 to 55 are worried about spending their retirement years at or near the poverty level because they cannot adequately save for retirement, according to a recent survey.

Women Fear They’ll Have Little Gold in Their Golden Years

Nearly 40 percent of women aged 30 to 55 are worried about spending their retirement years at or near the poverty level because they cannot adequately save for retirement, according to a recent survey.

The National Women’s 2005 Retirement Survey found that women of color are most concerned about their ability to save for retirement. While 53 percent of women of color report that they expect to live at or near the poverty level in their retirement years, just 33 percent of all men expect to face the same dilemma.

The survey was commissioned by the Heinz Family Philanthropies under the direction of Teresa Heinz, founder of the Women’s Institute for a Secure Retirement and chairman of the Heinz Family Philanthropies.

Here are some of the survey’s other key findings.

* Fifty-two percent of women expect to continue to work once they reach retirement age, including 57 percent of Hispanic women.

* Fifty-four percent of women have little to no money left to save for retirement once they pay their bills, rising to 62 percent among Hispanic and African-American women.

* When asked, “At the present time, do you feel that you are saving enough money for your retirement?” 62 percent of the women surveyed answered “no.” Among women of color, 74 percent of African-American and Hispanic women said they are not saving enough.

* When asked about barriers to saving for retirement, African-American women are more than twice as likely as white women to cite “financial responsibility for adult children or grandchildren” as a reason for not saving for retirement. Of the African-American women supporting their adult children or grandchildren, 63 percent report spending between $100 and $1,000 on them each month.

The Heinz Family Philanthropies commissioned this survey with the Christie Foundation, the Barbara Lee Foundation and others to identify the critical retirement savings issues facing women and to use the data to develop ways to help women secure their financial futures.

The survey polled 1,700 adults and has a margin of error of plus or minus 2.4 percentage points.

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