Are Annuities for You? Plus 9 Buying Tips


9 Need-to-Know Tips for Buying Annuities… And Knowing When They’re Not For You

You’re probably something of an expert in your own field—and that field probably isn’t insurance or annuities. How, then, can you work through the minefield of clauses, guarantees, and pages of small print? Here are nine ways to start.

AnnuitiesWhile you may feel uncomfortable doing this, you’re the one putting down thousands of dollars, and you have every right demand this. Remember: caveat emptor! It’s the buyer who must beware; you must protect yourself. Ultimately, the language in the annuity contract is what matters, but it doesn’t hurt to memorialize your verbal agreement with the agent in writing.

Hopefully your agent is totally honest and will help write the agreement, and both parties can sign and date it. If the agent starts to waffle, trust your instincts.

  • Tip No. 1 – Buy an annuity only for the contractual guarantee. You’re only guaranteed what’s written into the contract. The language must be simple to understand. If you don’t understand it, don’t sign it.For example, one contract I’ve seen said: [Continue reading]

Give Your Kids or Grandkids a Financial Boost


Summer is  a great time to teach your children about saving money for retirement and an interesting way to do it is by setting up a Roth IRA for them. Remember a Roth IRA is slightly different than a standard IRA. In a standard IRA you contribute pre-tax dollars and so it reduces the taxes you owe up front and it compounds tax-deferred but you still owe taxes on the entire amount when you withdraw it.

Roth IRA for ChildWith a Roth IRA you contribute after-tax dollars  so you don’t get a tax break up front but the money can grow tax free as long as it stays in the IRA and distributions can even be tax free if they are made after the age of 59½. This is a great compounding benefit. Plus distributions aren’t required to begin like a standard IRA so theoretically if they don’t need the money they can let it continue compounding forever.

The three major factors of compounding are time, starting value and the interest rate.  Because your kids are still young they have plenty of time, because it is an IRA the government isn’t taking a chunk of the profits every year so more gets put back to work. And because there is a penalty for withdrawal it encourages your kids to actually leave the money in there and let the compounding actually do its magic.

So how does this system work?

Normally, people contribute to their own IRA so how can you contribute to your kids or grandkids?  If they are working you can give them an additional incentive by “matching” any amount they earn. The law says they can contribute up to 100% of their gross income up to a maximum of  $5,500 per year. You can give a gift of up to $14,000 per year per person before you have to worry about gift taxes. So theoretically [Continue reading]

Key Facts About Your Family Insurance Plan

Insurance

Every family needs several different types of insurance. Some offer protection for the near term, and some for the long term. Both types are important for protecting your family's financial future. Make sure your family insurance plans are up to date … [Continue reading]

Why We Lied to Our Kids about Their Inheritance

Mark_Ford

How to Preserve Family Wealth and Provide Financial Benefits to Your Children Without Spoiling Them: A Lifetime Project The finest inheritance you can give to a child is to allow it to make its own way, completely on its own feet. – Isadora … [Continue reading]

Retirement Guard Duty 101

Retirement 101

By Dennis Miller I was just a kid—barely wet behind the ears. At two minutes before midnight, the sergeant of the guard and I marched onto the runway tarmac. Following protocol, I formally relieved the previous guard of his post. This was … [Continue reading]

10 Ways to Screw up Your Retirement

Retirement Planning

By Dennis Miller, Senior Editor, "Miller's Money Forever" There are many creative ways to screw up your retirement. Let me show you how it’s done. 1) Supporting adult children-- My wife Jo and I have friends with an unmarried, unemployed … [Continue reading]

Everyone Can Learn at Harvard (Infographic)

MOOC

The Rising Power of MOOCs: Now, everyone can learn at Harvard (or Yale, or…) 3 years ago, MOOCs were an idea. Now…. 5 million: number of students signed on to MOOCs, around the world 33,000: the average number of students that sign up for a … [Continue reading]

How Have Millennials Done So Far? (Infographic)

Millennials

What Do You Do When You’re 27? Older millennials were blindsided by the recession, and one of the first generations to take out massive debt for school. They are also one of the tech-savviest generations, and attended post-secondary institutions … [Continue reading]