NEW YORK--()--Fixed Payout Annuities (FPA) are overlooked by many investors, and their advisors, because of misunderstandings and myths; yet they can be one of the most valuable and basic tools in a retirement program.
“The S2I website is designed to help overcome jargon and legal language, and in fact the mystery, related to these contracts so they become as comfortable with investors as, say, muni bonds.”
The Savings2Income (S2I) planning method developed by Jerry Golden is designed to provide a retiree with an optimal amount of dependable, spendable income for the rest of his or her life. The key is building up guaranteed income that lasts a lifetime, through laddered purchases of FPA contracts over several years until a “no-worry age” chosen by the investor is reached. These FPAs can be purchased from the best in class annuity companies.
Golden, who has been involved with payout annuities for four decades, and holds two patents related to payout annuities said, “Coming from a planning approach, we view the FPA as just another, but important element, in an investor’s Plan for Retirement Income.”
Savings2Income (S2I) has added several new features and new educational materials to its website (www.savings2income.com) to help investors understand how FPAs operate and the value they add to a Plan for Retirement Income.
The S2I website includes a Current Income Tool visitors can use to get an instantaneous estimate of monthly or annual income from a “basic” FPA as the starting point for consideration - a payout annuity providing lifetime income, with a return equal to the premium paid as the minimum payout in case of early death. With most companies, this basic annuity, Life with Refund Guarantee, provides reasonable liquidity (technically called the “commuted value”).
Golden added, “The S2I website is designed to help overcome jargon and legal language, and in fact the mystery, related to these contracts so they become as comfortable with investors as, say, muni bonds.”
As part of this uncovering process, S2I also has a proprietary tool that determines the implicit annuity interest crediting rate that insurers build into their purchase prices. Based on this methodology, the implicit rate in December, 2012 for most life annuities was around 3%. This is significantly higher than the US Treasury rate for comparable durations.
In addition to obtaining these instantaneous calculations, visitors to the site will be able to request Customized Quotes for other forms of annuities, based on comparative surveys of best in class annuities from highly rated annuity companies.
S2I’s free Guide to Fixed Payout Annuities (available later this month) will address other features of annuities, and aspects of saving for retirement, including:
a. FPA cash flow vs. annuity crediting rates
b. FPA liquidity and beneficiary protection features
c. Impact on FPA of changes in tax law recently passed
d. FPAs vs. deferred annuity products with Living Benefit Guarantees
The S2I website and educational materials allow consumers to understand how payout annuities are essential elements of any plan that offers dependable, spendable retirement income guaranteed for life.
Jerry Golden, president of Golden Retirement, LLC, has developed the Savings2Income (“S2I’) planning method, a plain talk approach to creating a reliable stream of retirement income easily understood by average investors—with low costs, tax control and smart risk management.