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7 percent annuity return 

When considering the formula for present value of an seven percent return annuity, there are many factors to investigate along the way. While some may consider this to be a cumbersome activity, history suggests that investigating the present value of an annuity due will pay often off if not immediately then down the road. For example is one considering the purchase of an existing annuity due, or is one considering the sale of an existing annuity due, or the purchase of a new annuity? Or is one considering evaluating an existing annuity for estate tax purposes? What discount rate assumptions are proper and what financial crediting factors are appropriate?

 

 
 
Tags:  seven percent return  7 percent return  7 % return  7% return  seven percent annuity return  7 percent annuity return  7 % annuity return  7% annuity return 
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Published:  April 20, 2012
 
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Slide 1: ==== ==== When considering the formula for present value of an seven percent return annuity, there are many factors to investigate along the way. While some may consider this to be a cumbersome activity, history suggests that investigating the present value of an annuity due will pay often off if not immediately then down the road. For example is one considering the purchase of an existing annuity due, or is one considering the sale of an existing annuity due, or the purchase of a new annuity? Or is one considering evaluating an existing annuity for estate tax purposes? What discount rate assumptions are proper and what financial crediting factors are appropriate? http://www.sevenpercentreturn.com ==== ==== Annuities offer the assurance of a stream of income for life or for a specific period of time. For investors who fear the potential loss of all their money the guarantee of an income stream is important and that is why many consider purchasing a fixed, variable or indexed annuity. This protection makes annuities for seniors a great retirement income source. Historically, people wanting to secure an income stream in retirement purchased fixed annuities which provide a guaranteed rate of return on investment and a fixed payment every month after retirement. Variable and Indexed Annuities Today many choose variable annuities or indexed annuities where the returns are tied to the stock and bond markets. The returns on variable and indexed annuities are not guaranteed and vary with the markets. Variable annuities have the potential of a greater return than fixed annuities and the risk of earning less. Indexed Annuities also connected to stocks and bonds are designed to return a targeted rate which is higher than a fixed rate annuity. If the market falls the contract guarantees a minimum return limiting the risk of indexed annuities. In return for the minimum guarantee there is also a maximum return limit. The maximum limit is usually stated as a percentage of the return on the investment, for example 90% of the return on the investment would be credited to the annuity. Most returns on indexed annuities are also limited to returns from market price changes only and not from dividends. Guaranteed Withdrawal Benefit Riders for Variable and Indexed Annuities Variable and indexed annuities are often marketed with benefit riders that mitigate the risk to the investor in periods of market decline. These riders come at a cost and may or not make sense for you based upon your specific circumstance. The guaranteed minimum withdrawal benefit (GMWB) and the guaranteed minimum income
Slide 2: benefit (GMIB) riders can cost between 50 and 75 basis points of the value of your annuity on a continuing basis. The GMWB guarantees the right to take annual withdrawals from your contract at your option at a specified minimum payment without annuitizing the contract. This specified minimum payment is determined by a fixed percentage stated in the rider that is applied to the greater of the premium or the cash value of the contract. The GMIB guarantees a minimum income after annuitization regardless of the account value fluctuations due to market conditions. Generally, the GMWB doesn't make sense unless you plan to hold the annuity for 15 to 20 years and make use of the withdrawal benefit. The GMIB is only useful if you plan to annuitize and hold your annuity beyond the required waiting period (typically 10 years). Many contracts limit the annuitization to lifetime payouts which would not necessarily be attractive for those who are dealing with health care issues or other large financial needs later in retirement. Be sure to shop around and make sure the guaranteed withdrawal benefit rider you are considering is the best deal available in today's highly competitive market. Many indexed annuities will offer guaranteed income riders with a 7-8% roll up rate which after average variable annuity fees and the cost of the riders is a better rate of return than the most variable annuities with a guaranteed income rider can offer. Benefit riders are optional in a variable or indexed annuity purchase and should be evaluated based on their own merits, your current retirement income investments, your personal financial situation and financial goals. If you have questions and would like to have annuities explained, it's a good idea to work with a qualified advisor to help you evaluate which annuity options are best for you. For more info on Indexed Annuities and annuities for seniors check out these great sites. Article Source: http://EzineArticles.com/?expert=Steven_Parsley ==== ==== When considering the formula for present value of an seven percent return annuity, there are many factors to investigate along the way. While some may consider this to be a cumbersome activity, history suggests that investigating the present value of an annuity due will pay often off if not immediately then down the road. For example is one considering the purchase of an existing annuity due, or is one considering the sale of an existing annuity due, or the purchase of a new
Slide 3: annuity? Or is one considering evaluating an existing annuity for estate tax purposes? What discount rate assumptions are proper and what financial crediting factors are appropriate? http://www.sevenpercentreturn.com ==== ====

   
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