I think it might be nearly impossible for consumers to keep track of the nuances of all of the different types of annuities. One of the easiest ways to distinguish them is to divide them into two categories: Annuities for accumulation only and annuities for guaranteed income benefits. Annuities can be used to accumulate money. The annuity wrapper protects all gains from being taxed. There are various investment options depending on the type of annuity. Variable annuities use mutual fund … [Read more...]

If you're still working, you may or may not be familiar with a "in-service rollover". Most companies allow you to rollover your company retirement funds into a self-directed IRA even though you're still working after you have reached the age of 59 1/2. There are tremendous advantages to the self-directed IRA over the options of the company retirement plan. Company retirement plans are generally built for the accumulator, and not the pre-retiree with only years left before retirement. That … [Read more...]

Moving from the accumulation to the distribution phase of life has some challenges. It's hard to go from seeing your account balances grow year-by-year to having them shrink year-by-year as retirement progresses. Ideally, you will live on just the gains and interest, but many retirees will need to draw their accounts down systematically over time to make everything work. That can feel disconcerting, especially when you're used to growing account balances. Many retirees will compensate … [Read more...]

Although company pensions are going the way of the dinosaur, you may still be in a position to choose between taking a lump sum or a monthly stream of income from your pension. Deciding between these two is not always straightforward. There are many factors that go into determining which may be better for you. I have an opinion that the lump sum has some hidden advantages that many overlook. The first is flexibility. Once you have received a lump sum, you can decide where each and every … [Read more...]

New Online Minicourse - Buckets Approach to Retirement I believe in making decision-making simple and straightforward. I think the “Buckets Approach to Retirement Planning” makes life much more simple when determining where to put money and how to evaluate the dizzying number of options. I made my recent video series into a minicourse that can be viewed for free by anyone. If you haven't seen the video series yet, I encourage you to do so. And if you know someone who could benefit … [Read more...]