Paul Tyler

The Good, The Bad, And The Ugly On Annuities In 401k Plans

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By Christopher Carosa, CTFA

You may love annuities. You may hate annuities. You may merely say “Meh” about annuities. Whatever the case, the discussion of placing annuities in retirements plans has increased over the last several years. Depending on what surveys you read, people either want the comfort of a “guaranteed” income stream in retirement, or they’re reluctant to risk all their retirement savings on one complicated product.

And, as a practical matter, in order to generate the kind of income that will yield enough money to pay typical retirement living expenses, you need far above the average retirement savings amount.

“Based on someone’s age, an annuity payout can be more or less,” says Erik Sussman, CEO of the Institute of Financial Wellness in Fort Lauderdale, Florida. “The older someone is, the more income the annuity will provide. Generally, you can receive approximately 6% from most annuities at age 65 and beyond, so for 100K it would be 6K a year, 400k it would be 24K a year, and for a million, 60k a year. There are many factors that determine an annuities payout, but this is a good rule of thumb.”

Bear in mind, recent data shows the typical 401k account holds less than $200K at retirement age. Can you live on $12,000 a year?

If the numbers don’t add up for annuities (or anything else, for that matter), where is the demand for these products coming from?

“I believe annuities become more popular in turbulent times, which certainly has been the case the past few years, continuing today with war being waged in Eastern Europe,” says Anthony C. Kure, Managing Director of Northeastern Ohio Market at Principal Wealth Management in Cleveland, Ohio. “The companies that offer annuities capitalize on the fear that comes from uncertain economic times when they roll out advertising for these products. It’s also for those who don’t want to manage their retirement, turning it over to an insurance company.”

Without a clear understanding of the actual income typically produced by annuities for the amount they’ve saved, retirement savers focus on other aspects of the products that sound more attractive.

“The demand for annuities in retirement plans is coming from the increase in life expectancy and the decrease in defined benefit pension plans,” says Sussman. “In essence, an annuity is a way to create your own defined benefit plan.”

In addition, regulators have been trending towards an annuity solution as a way to at least show the appearance of addressing issues important to retirement.

“Right now, policymakers are pushing it as a solution to mounting retirement crisis,” says Paul Tyler, CMO at Nassau Financial Group in Hartford, Connecticut. “As more people start to get income projections with their annual statements, they will increasingly ask for it.”

But can 401k plan participants trust what those “monthly project income” figures tell them?

“There are simply too many variables to accurately predict anyone’s income on a future basis,” says Scott Eichler, Founder of Standing Oak Advisors in Orange County, California. “It would be like asking someone to predict which pitches to a specific batter would result in home runs. You may guess correctly, but chances are low.”

In fact, the danger is these mandatory reporting figures can trick plan participants into thinking things are either too rosy or too dour.

Read the Full Article: https://fiduciarynews.com/2022/03/the-good-the-bad-and-the-ugly-on-annuities-in-401k-plans/ 

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersThe Good, The Bad, And The Ugly On Annuities In 401k Plans
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5 Simple Habits That Will Help You Save for Retirement

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By Bob Haegele

Saving for retirement can be a struggle. You might have many years left in your career, and it can seem almost impossible to save the necessary hundreds of thousands or even a million dollars. While a million dollars is still a lot of money, there are some simple habits you can start today that will help you save for retirement.

Everyone has different goals, of course, and you may not quite be aiming for a million bucks. Whatever dollar amount you have your sights set on, the basic principles for retirement savings are the same. Put the right systems in place, and you won’t even have to think about it very much.

Let’s dive into five simple, yet effective ways to get started on your retirement savings.

Start Investing at Work

For most of us, the first way to start investing is to do so at work. If your employer offers a retirement plan (or multiple plans), be sure to contribute to those plans monthly. Some employers may opt you in automatically, but double-check to ensure you are contributing. Retirement plans are tax-advantaged, so they will make your money go further.

Richard Tatum, president of retirement services at VestWell, recommends opening an IRA if you don’t have a 401(k) or a similar plan at work. “If your employer doesn’t offer one, ask your financial advisor about opening an IRA (individual retirement account), which is also a tax-advantaged retirement savings account, but it doesn’t require a company to sponsor the account to open one.”

Take Advantage of Employer Matching

Employer-sponsored retirement plans such as the 401(k) often come with employer matching, and that’s something everyone should maximize. No matter what your retirement goals may be, employer matching is one of the easiest ways to increase how much you save.

The way employer matching works is simple: any time you contribute to your retirement plan, your employer matches that contribution. There are usually limits on how much they will match and the percentage may be different in some cases, but you are guaranteed to have extra retirement savings if you take advantage.

“Employers will often match a certain percentage of your retirement plan contributions,” says Tatum. “Make sure you’re putting in enough to at least get the maximum they will contribute — it’s free money!”

Save Money Before Anyone Knows You Have It

Let’s face it: getting paid can be very exciting. You see your paycheck come through and you immediately start thinking about all the things you can buy with it. A new phone, some new clothes, or whatever it is that interests you. But if you never see that money come through, you’ll probably be less tempted to spend it!

“Try bumping up your 401(k) contribution by just $50 to $100 each paycheck,” says Paul Tyler, chief marketing officer at Nassau Financial Group. “If anyone is watching the bank deposits, they probably won’t notice. But you will be surprised even in the first year how much faster your account will grow.”

Read the entire article, here: https://www.gobankingrates.com/retirement/planning/save-for-retirement-simple-habits/

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley Saunders5 Simple Habits That Will Help You Save for Retirement
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Evaluating an early retirement offer: What to consider before accepting one

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…Your financial situation

While you may end up taking an offer because you’re making the best of a bad situation, you’ll want to consider a number of issues that may arise if you’re not employed. But while you’re taking early retirement from this company, that doesn’t mean you have to retire. You’ll also want to consider how accepting the offer affects your retirement finances such as Social Security.

If working is a lifestyle decision, you’re in an enviable position, but whether working is a choice or not, you’ll still need to assess your financial picture, especially if you’re on the younger side. Chuck Czajka, founder and CEO of Macro Money Concepts in Stuart, Florida cautions that “The younger you are, the more stress will be placed on retirement assets.”

“Do you need to work to pay your bills,” says Tyler. “You may be lucky enough to have earned and saved enough to be financially independent. If you fall into this rare category, congratulations.”

If the offer is generous and you think you’re able to retire, experts recommend that you review your finances thoroughly before making that decision.

You’ll want to ask yourself:

  • Do you have enough to live comfortably in retirement?
  • Are you old enough to access retirement accounts such as a 401(k) or IRA penalty-free?
  • Do you have access to healthcare, and will you be able to afford it?
  • What other sources of retirement income do you have available?
  • Will taking early retirement have a negative impact on your pension (traditional defined benefit plan)?
  • Do you have hobbies or other pursuits that you are passionate about if you retire early and no longer have work to keep you motivated and engaged?

If you retire early, you might be able to get by for a few years until you can access your full retirement funds at age 59 1/2. However, you’ll also want to consider how early retirement affects Social Security, a decision that will impact your monthly benefits for the rest of your life:

  • Calculate your benefits to see how much retiring now will affect your payout later.
  • Have you already worked enough to claim a sufficient benefit?
  • Will you be able to pull through financially until Social Security kicks in?
  • Will you opt for an early benefit rather than your full retirement benefit?

While early retirement sounds attractive, you’ll want to keep these questions in mind and consult with a financial planner and/or tax professional, because you may be giving up more than you anticipated – financially and otherwise – when you first decided to retire. …

Read the full article: https://www.bankrate.com/retirement/should-you-accept-early-retirement-offer/

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEvaluating an early retirement offer: What to consider before accepting one
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Annuities And Predicting The Right Time For The Market With Paul Tyler

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Paul Tyler, one of the That Annuity Show hosts and Nassau CMO, was a recent guest on Kevin McCullough Radio! Paul joins Kevin to talk about annuities and market predictions.

Listen to the audio release, here: https://soundcloud.com/kmcradio/20211206-annuitys-and-predicting-the-right-time-for-the-market-with-paul-tyler

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersAnnuities And Predicting The Right Time For The Market With Paul Tyler
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Six Retirement Planning Lessons From Netflix’s ‘Squid Game’

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How to make sure your clients avoid playing games with their retirement funds.

Imagine that one of your clients drops into your office just as you are about to leave for the night. They describe a wonderful opportunity to solve all their debt problems. An organization has offered to provide them with an enormous payout if they outlive 499 other people.

Is this an unusual group pension plan, they ask? No, you say. It is a tontine. You open up a book and explain that a tontine is one of the world’s earliest forms of an annuity.

Starting in the 17th century, you continue, nations used tontines as a way to raise revenue and create streams of income for segments of the population. The last person in the pool typically received a disproportionate share of capital. In the insurance industry, we refer to this as the “power of pooled mortality.”

Oh, by the way, your client adds, mortality reminds her to tell you that the organization will kill her if she doesn’t make the right decisions at critical points in the coming days.

Most people today would describe this as the plot of a slightly demented Netflix series. But you clearly failed to complete a crucial fact-finding exercise. And there lies the first lesson from this series.

Click here to access the full article and the slide show of the 6 steps: https://www.wealthmanagement.com/retirement-planning/six-retirement-planning-lessons-netflixs-squid-game 

Also available at: https://www.benzinga.com/personal-finance/21/11/23911653/5-lessons-that-the-squid-game-offers-us-for-retirement-savings-the-use-of-annuities 

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Show Sponsors

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersSix Retirement Planning Lessons From Netflix’s ‘Squid Game’
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Sales May Be Down, But The Annuity Industry Will Bounce Back

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August 5, 2020 by Paul Tyler

EPISODE 57.

Sheryl Moore, Chief Storyteller of Wink, Inc. and industry guru joins us to talk about the state of the annuity market. Yes, sales are down. But Sheryl finds some bright spots and suggests ways we can adapt our products and sales processes to succeed over the next 12-18 months.

Click HERE to listen via That Annuity Show

Visit the post on Winkintel.com here.

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersSales May Be Down, But The Annuity Industry Will Bounce Back
read more