The Value of Financial Advice
I am often asked whether it is worth the cost to hire a financial advisor. After all, they charge you money to make you money. People say they can listen to the news to find out where and how to...
View ArticleA Simple Allocation Example
Upon entering retirement, you have several options in front of you in terms of allocating between stocks, bonds, and income annuities. Let us consider a simple example and four different approaches. 1....
View ArticleA Menu Of Income Annuity Features And Options
Income annuities come in a variety of shapes and sizes. It can be overwhelming to know which one makes the most sense for your situation. In this column, I will explore how income annuities work and...
View ArticleAnnuity Pricing 101
How are different types of annuities priced? It’s not as hard as you might think , as the basic recipe requires just three ingredients: 1) Mortality rates (which vary by age and gender) impact how long...
View ArticleAnnuity Pricing 102
In today’s post, I continue the discussion on Annuity Pricing 101 which I began recently. In today’s scenario, we’ll see what happens to the price of an annuity if: We guarantee income will be provided...
View ArticleSecuring Longevity Insurance Through Income Annuities
I have published a few pieces in the past couple weeks on how income annuities are priced and used. Understanding how to use annuities can be a great benefit when planning for retirement. Let’s...
View ArticleAnnuity Pricing Sensitivity
With all of my discussions of annuities lately, it is worthwhile to also consider the sensitivity of annuity pricing to interest rates, gender and age-related mortality factors. Relationship Between...
View ArticlePayout Rates and Returns on Income Annuities
The pricing of an income annuity is typically described using either the monthly income amount it generates, or as the annual payout rate of the income received as a percentage of the premium amount....
View ArticleA Brief History of Social Security
Recipients of Social Security benefits today are not just retirees – they’re disabled workers, spouses and young children of deceased or disabled workers, and the spouses and survivors of retirees....
View ArticleIntroducing the Social Security Claiming Decision
For the vast majority of Americans, Social Security benefits serve as the core of a retirement income strategy. As a government-backed, inflation-adjusted monthly income for life, Social Security...
View ArticleCalculating Social Security Retirement Benefits
I will discuss the philosophy of claiming strategies later, but it is meaningful to first consider how retirement benefits are calculated. The Social Security Administration has now followed the same...
View ArticleKeep Social Security Changes In Perspective
As you may have heard, Congress made some notable changes to Social Security last week. I’ve received more emails asking about these changes than any other event in the retirement income world. I’m...
View ArticlePhilosophy of Social Security Claiming Strategies
Social Security claiming strategies can be extremely complicated. Treaties on this topic, some of which are listed in the table below, provide page after page of details, nuances, and exceptions. When...
View ArticleWhen Are People Claiming Social Security?
One of the hottest topics in retirement income planning over the past several years has been how to help individuals strategize on their Social Security claiming decisions. These discussions generally...
View ArticleArguments To Justify A Delayed Claiming Age For Social Security
With an understanding about how benefits are calculated, the important question to consider becomes how to develop a Social Security claiming strategy. When should you apply for benefits? Disagreement...
View ArticleSocial Security As An Investment
The alternative to treating Social Security as insurance is to view it as an investment, or as a gamble on how long one lives. This can be problematic. The investment approach focuses more on the...
View ArticleHow Time Horizon and Discount Rate Affect Social Security
One way to view the decision to delay Social Security as an “investment” is by using a present value calculation to identify which strategy can provide the most lifetime Social Security benefits and...
View ArticleSocial Security: The Best Annuity Money Can Buy
A final frame for viewing the Social Security claiming decision is as an annuity purchase. By starting at age 70 instead of 62, the retiree misses eight years of receiving a benefit of $22,500. But...
View ArticleTax Considerations When Delaying Social Security
Delaying Social Security can potentially contribute to an overall tax strategy for retirement. Every case is different, but generally speaking, when you add taxes to the mix, the case for delaying...
View ArticleArguments for Claiming Social Security Early
Believe it or not, legitimate arguments exist for claiming Social Security early. Sometimes individuals simply need the funds to survive and have no other income alternatives to cover delaying benefits...
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