Can I Buy an Annuity Online or Without an Agent?

The internet has become the primary channel for consumers to obtain goods and services over the past twenty years, with the population as a whole becoming increasingly comfortable shopping online. You can now just as easily buy a car or your groceries via the internet as you can a bestselling book. 

The convenience of e-commerce is what draws many of us in, allowing for a seemingly endless selection of goods while saving valuable time and money. The internet has even developed into the channel of choice for purchasing financial products, including stocks, bonds, and life insurance. And there has been growing demand by investors to buy annuities online. 


And it’s no wonder that consumers look online for income planning products like annuities. Most savvy investors are well aware of their benefits, but many advisors fail to include them as a significant aspect of financial and retirement plans. According to one survey, 72 percent of advisors did not mention annuities with lifetime income as a strategy for retirement planning, showcasing not only why an investor may turn to their own online research for guidance, but also why individuals must find a trusted financial advisor that specializes in wealth concepts beyond stocks and bonds.

However, one thing that we’ve learned about the convenience of shopping online is that just because you can buy it online, doesn’t mean that you should. The more significant the purchase, the more difficult it is to guarantee you are making the right choice with your hard earned money. If you consider the complexity of a financial solution like an annuity, the question to consider is not, “Can I buy an annuity online without an agent?” but whether or not you should buy online as the most appropriate avenue for purchase. Let’s explore the many things a wise investor should first consider.


Can I Successfully Buy an Annuity Online or Without an Agent?

While you may see ads for online brokerage accounts, you’re less likely to find annuities advertised online. Annuities have not yet become commoditized in the way that brokerage accounts have, so there will be more work in finding a product that meets your needs without the guidance of a qualified insurance advisor. 

So, yes, you can buy annuities online without the help of an insurance agent, but you’ll have to spend a significant amount of time on research. And, there are only two channels for direct annuity sales online:

• Life insurance companies: Life insurances companies selling direct-to-consumer, which include the many household name insurers, will be among the top results in your search, but not all of them sell directly online. You may find a familiar name, click on a link and maneuver your way through a complicated online form only to land on a page that still requires you to speak to an agent in order to make your purchase. This is not only frustrating, it is misleading.
• Online marketplaces: Online marketplaces that sell investment products, including annuities, will also be among your search results. But how do you choose from these providers? Are they legitimate? Will you still have to speak to an agent? Do they have the breadth of products to meet your particular needs? There are many questions to be asked before investing with these sometimes unknown sources—and you may find that answers are hard to come by.

Trust is a crucial element when selecting a financial provider. What started out as a search to purchase an annuity online can easily turn into a mission to ensure that you can trust the provider. If you find yourself searching the Better Business Bureau website for complaints, perhaps you should trust your instincts and reconsider whether a licensed and well-respected financial advisor that you can build a relationship with is the most reliable means to secure your retirement, as opposed to trying to tackle the job on your own.


How to Buy the Right Annuity (and Why Having an Advisor Matters)

As with any financial or retirement product, you must take the time to fully understand what it is that you are buying. A survey by the Insured Retirement Institute found that 75% of investors claimed to be familiar with annuities, but only 46% knew that annuities can provide lifetime income.

 Annuities are designed to meet your long-term needs for retirement income and to help ensure that you don’t outlive your savings. There are two types of annuities: variable and fixed. Variable annuities place your investment in stocks and bonds, making them subject to market volatility. This means that your account could be worth more or less than your initial investment when you retire. Variable annuities require special securities licenses and put your principal at risk. They also have high fees. Fixed annuities, in contrast, can offer a guaranteed rate of return and are best when seeking a fixed or increasing income at retirement without the risk of market loss. Besides variable and fixed annuities, there are also subcategories of annuities that can add up to hundreds of options that may or may not be appropriate for you, your long-term goals, and your particular financial situation. 
 
As you can clearly see, annuities are among the more complex financial products that you can purchase; the do-it-yourself route is definitely not recommended. The stakes are just too high! While you certainly can purchase an annuity online, choosing to do so will limit you to very few choices. Whatever time or upfront cost you believe to be saving in the short-term may end up costing you your financial security in retirement. Having a trusted advisor that can match you with an annuity based on your specific financial picture is essential. It is the only reliable option to help you navigate through the myriad of annuity choices on the market. 

The annuity and insurance advisors at Howard Kaye Insurance work with more than 50 highly-rated and trusted insurance carriers. Helping you meet your retirement goal with individualized attention is our primary objective. Call us at 800-DIE-RICH or reach out online. We can work with you to create a plan that ensures you don’t outlive your retirement savings.

source: howardkayeinsurance.com

Buy Life Insurance with Social Security Benefits to Create a Retirement Nest Egg for Your Kids

Are you at or near the point of qualifying for Social Security benefits? If so, you may or may not need those payments to supplement your other income sources. For many of us, the focus becomes repositioning those payments to create a greater legacy for our kids or charity. We’ve dealt with this issue at length and below you’ll find a few ideas about how to handle this situation. 


Using Social Security to Buy Life Insurance

Let’s take Jim, a retired executive who has accumulated $15 million in assets over his lifetime. At 69 years old, Jim still has not turned on Social Security benefits because he knows they continue to increase each year that he waits. However, at 70 years old, the payments max out and there is no further benefit to waiting.

Jim’s plan is to turn on the roughly $40,000 of income and have it directly deposited into his checking account. In the process, he will withhold one-third of the payment to cover taxes that will be due on the income. Jim is trying to figure out the best way to leverage those payments into an eventual legacy, either for his kids or charity, and how to do so without increasing the size of his taxable estate.

We believe Jim should use his payments to buy a life insurance policy. Doing so will allow him to access some incredible advantages not offered through other vehicles. First, to prevent his Social Security payments from increasing the size of his estate, Jim decides to set up an irrevocable life insurance trust in which to purchase the policy. He decides to make his cousin the trustee and his two kids the beneficiaries. 

Given the roughly $25,000 that is left after paying taxes, Jim can purchase over $1 million of life insurance. As soon as he makes that first premium payment, the $1 million benefit is locked in. This strategy perfectly meets Jim’s desire to create a future nest egg for his kids without increasing the size of his estate. Plus, he can do so without taking on the market risk associated with stocks and bonds. 


Charitable Giving with Social Security Payments

Now, let’s suppose Jim wanted to use those payments to support his favorite charity instead. Rather than own the policy himself, he can $40,000 each year to the charity and have them use the money to buy a life insurance policy. Why would he do this? By donating the money, he can more than likely take a tax deduction for the full $40,000, part of which is the net amount of his Social Security income.

Also, by having the charity own the policy rather than himself, he is avoiding the death benefit being included in his estate: Nothing would upset Jim more than watching 40% of his gift slip away to unnecessary taxation. Also, because his premium is now $40,000 per year instead of $25,000, the face amount of his policy has jumped from $1 million to $1.5 million.  

When we compare the results of these strategies against the alternatives, it’s hard to rationalize a different move. If Jim just took his Social Security payments, paid the tax, and gave the proceeds to charity, he would likely give them somewhere between $300,000 and $600,000 in total depending on how long he lives. By using life insurance, he creates a $1.5 million gift, even if he dies in year one! 

If the charity is wise, they can choose to only spend the interest from that lump sum and create a gift that gives forever into perpetuity. Life insurance also provides a guaranteed death benefit, avoiding the volatility and uncertainty of market investments.   


The advisors at Howard Kaye can show you how to think differently about your estate plan. A fairly simple strategy such as the one illustrated above can change lives, just by taking an extra income stream and repurposing it for the benefit of your family or charity. Call 800-DIE-RICH to speak with us today and let us start crafting a similar plan for you.

source: howardkayeinsurance.com

How To Buy Stock Online – Your Ultimate Guide

If you would like to buy stock online, then you’re making a smart move – because more and more traders are using the Internet to place their trades conveniently and easily by using an online brokerage service. In this guide, we are going to share some further information on the subject of purchasing stock online, so by the time you have finished reading, you will know which steps to take next.

To begin with, the most efficient way to buy stock online is to simply use an online broker, but it’s important to remember that not all of these services are created equally. In general, they come with various features and functions that you need to understand before you settle on a specific platform.

In particular, you need to pay close attention to the commission that’s involved when using an online brokerage to trade stock for you. In most cases, this commission will be a percentage of the stock purchase price, but there will be a variety of different deals available if you investigate further.

Next, it’s well worth finding a stockbroker who has expert advice and knowledge to share – because this goes a long way towards making sure you purchase stock that will give you a respectable return on your investment rather than become a liability. Several of the top online stockbroker services come with a range of educational and training materials, and this information is very useful – especially if you are a beginner.

Something else you need to consider when it comes to purchasing stock online is whether you want to use a full-service solution. The key benefit of using full-service brokers is that you will not need to follow the markets yourself, and you can trust the experience and knowledge of your broker to make savvy trading decisions for you.

Of course, this involves a great deal of trust, and there will usually be no guarantees of a return on your investment –so you will need to do plenty of research into the overall track record of any full-service broker before you part with your cash.

However, many people greatly appreciate the convenience offered by a full-service solution, and this is often an effective way to invest part of a retirement fund or a cash windfall that you want to make the most out of. By placing these funds into the hands of a skilled broker, you will be able to secure your financial investment for the long term, and possibly earn an excellent profit in the process.

Yet another option you may be interested in is using a discount broker. While these services do not require such a hands-on experience, they can certainly save you quite a bit of money – so many people refer them for this reason alone.

If you already have expert knowledge in the stock market and know exactly which stocks you want to buy and sell, then using a discount broker who charges a minor fee will usually be a good decision. In most cases, these services are best for people who already have a great deal of experience, so they do not need the extra handholding that comes with using a full-service broker.

Finally, it’s wise to devise a system for buying and selling your stocks, rather than doing it in a careless and haphazard manner. Many people use a stock pick service which gives them expert picking advice, and this type of assistance can be a huge boon to your stock trading efforts.

Conclusion

Overall, learning how to buy stock online is a relatively straightforward process – but the hard part comes with knowing which stocks to buy and when to sell them. However, the first step is to find a quality broker, and the information in this guide should guide you towards a savvy decision.

source: stocktrading4beginners.info

Is 2013 the worst time in history to retire?

Retirees taking an annuity at today's prices face some of the worst rates ever. So if you are about to take your pension, is there any way to escape the downward annuity-rate spiral?

Is now the worst time ever to retire?











This rather drastic description may apply, to some extent at least, if you are among the thousands of people who have to buy an annuity this year.

Annuities are the insurance products used to turn someone’s pension savings into a guaranteed monthly income for the rest of their life.

Rock Bottom

But a combination of economic and political factors has resulted in annuity rates falling to record low levels.

Matthew Renier, director of retirement specialist Retire Right, says: "Taking an annuity at today's prices is one of the worst times in history to have to do so."

The payouts on annuities are linked to interest rates and yields on government bonds, or gilts.

The company which sells you an annuity will take your pension money and invest it in order to pay you the income you have been guaranteed.

But if it can't get a very good rate of return on its investment, this will be reflected in the rate you are offered.

No end in Sight

But since the credit crunch, interest rates and gilt yields in the UK and around the world have slumped.

No recovery is expected for a few years at least.

Renier adds: "Low interest rates have forced annuity rates down for a number of years now, and they fell by around 10 per cent in the last three months of 2012 alone.

"And while there was a slight increase in January, low annuity rates are here to stay."

So if you are about to take your pension, is there any way for you to escape the downward annuity-rate spiral?

Here are your options:

Keep Working and Save More

If you are due to retire and take your pension in the next few months, there is always the option of carrying on working and trying to build up a larger fund.

This means you wouldn’t have to buy an annuity now, and it would mean you'll probably have more money when you do so.

Also, the older you are when you buy an annuity, the better rate you'll get, as the seller will expect to have to make payments for a shorter period of time.

There are downsides, however. Firstly, you may not want to carry on working.


And while employers can no longer force staff to leave because of their age, you can be forcibly retired if your age means you can no longer carry out your duties.

Secondly, there is no guarantee that annuity rates will be any better in a year or two's time.

And your pension fund could also drop in value during this period if stock markets perform badly.

Go for the drawdown option

If you have a decent amount of pension saved up, you could consider income drawdown.

This involves leaving your pension invested in shares and other assets in the hope that they continue to grow, while taking a regular income from it.

But this approach has its risks. Again, stock-market volatility could lead to falls in the size of your holding.

And unlike an annuity, your income is in no way guaranteed.

Drawdown is not something that should be entered into lightly.

If your pension is all you have to fund your retirement, and if it is not particularly large, there is a chance that drawdown will not be the right option for you.

Bite the bullet and buy now

Annuity rates might be bad at the moment, but they could be even worse in a year or two's time.

If you delay your purchase, you risk getting an even worse return when you do come to buy.

And you will have missed out on the annuity income you would have received in the interim.

But there are a number of ways you can boost your annuity income, whenever you decide to buy.

One of the simplest is to shop around before you buy.

You can get an annuity from any company, not just the firm which runs your pension, and rates can vary significantly.

Also look at the type of annuity you buy.

If you have any health problems, let the seller know as this could entitle you to a higher-rate enhanced annuity based on lower life expectancy.

source: confused.com