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April 24, 2006 | Josh Friedman
What is an annuity? Annuities are insurance contracts. Buyers typically contribute a lump sum and pay no taxes on the investment gains or interest until they tap the money years later. The term traces its origin to ancient Rome, where citizens paid a lump sum for a contract that promised an annua, or yearly payment, for life. What are the different kinds of annuities? There are two main types: fixed and variable.
January 13, 2013 | Liz Weston, Money Talk
Dear Liz: Recently, someone from an insurance company proposed that I stop investing through my 401(k) at work and instead invest in his insurance company contract with after-tax dollars. He claims the funds would be guaranteed so that I would never lose principal, although there would be a cap on how much I could make in any given year. His claim is that it is better to forgo the tax deduction I would get from my 401(k) contributions so that I can take the money out of this contract tax-free in 20 or 30 years.
February 12, 2006 | Kathy M. Kristof, Times Staff Writer
Is a tax-deferred annuity a good investment for you? If two insurance trade groups have their way, all investors will discuss that question with their insurance agents before buying. The American Council of Life Insurers and the Insurance Marketplace Standards Assn. recently announced a push to extend "suitability" protections to every consumer. These protections require insurance salespeople to consider an investor's time horizon, assets and goals before recommending an annuity.
September 30, 2012 | Liz Weston, Money Talk
Dear Liz: My former employer is offering the one-time opportunity to receive the value of my pension benefit as a lump-sum payment. The other option is to leave the money where it is and get a guaranteed monthly check from a single life annuity when I reach retirement age. I am 40 and single, and I have been investing regularly in a 401(k) since graduating from college. I have minimal debt aside from a car payment. When does it make financial sense to take a lump sum now instead of an annuity check later?
In a move that extends the development of banks into financial supermarkets, First Interstate Bancorp and insurance giant SunAmerica Inc. on Wednesday announced an agreement under which SunAmerica's tax-deferred variable annuities will be sold through First Interstate branches. SunAmerica, a Los Angeles-based life insurer with $23 billion in assets, said it struck a similar deal with Chase Manhattan Corp.
May 24, 1988 | Associated Press
The Supreme Court on Monday let stand a ruling that put millions of so-called fixed annuities under the jurisdiction of federal securities laws. Under the lower court ruling, fixed annuities paying fluctuating interest rates could be regulated the same as stocks and bonds. Insurance industry officials had opposed the rule, claiming that it imposed a heavy regulatory burden that would raise company costs and translate into higher prices for consumers.
November 10, 1996 | RUSS WILES, Russ Wiles, a financial writer for the Arizona Republic, specializes in mutual funds
Variable annuities are growing faster than mutual funds, they're offering more and better investment features, and they remain one of the few tax shelters left. But they're not making much of an impression on do-it-yourself investors. How else can you explain the lackluster reception given to a slew of variable annuities introduced by mainstream no-load mutual fund companies in recent years?
March 5, 1986
A U.S. district court approved the so-called enhancement plan, which would guarantee benefits and raise the rate of return on annuities issued nationwide by insurance subsidiaries of Baldwin-United, which is in rehabilitation. As a result, an initial $16.2-million payment, funded by Metropolitan Life and 60 other insurers, will be paid to an escrow fund to benefit Baldwin-United policyholders.
March 14, 1993 | KATHY M. KRISTOF
Now that tax rates are likely to rise under President Clinton, variable annuities are looking even more attractive to well-heeled investors. Some annuity companies say they are already seeing a surge in interest in the products, which wrap an insurance policy around mutual funds. But you need to be wary. Not all variable annuities are alike. If you aren't careful, you could find yourself paying high fees for lackluster performance. How do you choose a variable annuity?
April 14, 1991 | KATHY M. KRISTOF
Insurance annuities have become the investment of choice for many Americans who want to save for retirement. In the past few years, the annuity business has been growing at double-digit rates. Other types of life insurance products have also grown, but not as fast as annuities, industry experts say. There are a number of explanations for this sudden burst of popularity.
June 4, 2012 | By Michael Hiltzik
Former U.S. Sen. Alan Simpson (R-Wyoming), perhaps our leading avatar of misinformation about Social Security, sent us a lengthy email on Friday responding to our series of posts criticizing his error-rich take on the nation's preeminent social insurance program. You can read his entire email here . Be forewarned: It's a dizzying compendium of ignorance, myths, irrelevancies, and historical revisionism, leavened with a healthy dollop of defensiveness. (Simpson also seems at the outset to have confused columnist Michael Hiltzik , who has been writing about him, with editorial page editor and columnist Jim Newton , who hasn't.
June 26, 2011 | Liz Weston, Money Talk
Dear Liz: Do you have any advice for a family of six with only $200 a month to spend on food? My wife and I are in dire need of advice, as our bills keep increasing but neither of us has gotten a raise in six years. We have two garnishments on our paychecks that effectively take 50% of what we make. After health insurance and 401(k) loans are deducted, we bring home $2,000 a month. Our rent takes $1,400 of that and utilities take most of the rest. Do you have any miracle advice for us?
February 20, 2011 | Liz Weston, Money Talk
Dear Liz: My husband and I are struggling with whether to file for bankruptcy. We have $80,000 in credit card debt, which has ballooned because of high interest rates and our paying only the minimum. My husband and I were both laid off in 2008. I collected unemployment for not quite a year and still have not been able to find work. My husband found a job after a year and a half, but then was injured at work and faces another four to six months of recovery, so he is receiving only 67% of his former wage.
January 2, 2011 | Liz Weston, Money Talk
Dear Liz: I recently purchased a variable annuity. I researched the investment only after the fact and discovered that my new advisor had not disclosed its pitfalls. I came to him with all my questions afterward, but he was defensive and unprofessional. I feel completely deceived! Do I have any recourse? I feel like I made a huge mistake. Answer: The fat commissions that many annuities pay can tempt unethical or poorly educated advisors into painting an unrealistically rosy picture of these financial products.
September 26, 2010 | Jeff Shain
Reporting from Atlanta The permutations flew fast and furious for a time, some stretching the bounds of credibility on the most tangled final Sunday since the FedEx Cup became the PGA Tour's version of the postseason. One perfect storm could have given the Cup to a man who opened the week 28th on the points list. Another might have crowned points leader Matt Kuchar with a 25th-place finish. Paul Casey could have been the season champion without a tournament win. By the end, though, the formula was pretty simple.
August 20, 2009 | Nathan Olivarez-Giles
For $100, you could fund a shopping spree at the 99 Cents Only store or host a feast catered by your favorite fast-food eatery's dollar menu. Or you could buy a house -- maybe. The Santa Clarita Valley Rotary Club, a chapter of Rotary International, is hosting an online raffle of a house of the winner's choice valued up to $600,000, with an included reserve of $400,000 for closing costs and taxes on the sale, said Maureen Micklich, a spokeswoman for Samuel Dixon Family Health Centers Inc., which is a beneficiary of the contest.
January 15, 2004 | Kathy M. Kristof, Times Staff Writer
The National Assn. of Securities Dealers filed a disciplinary complaint Wednesday against financial advisory firm Waddell & Reed Inc. of Overland Park, Kan., charging it with selling unsuitable investments to thousands of clients. The firm's former president, Robert Hechler, and its national sales manager, Robert Williams, were named in the complaint.
March 22, 1991 | From Associated Press
Exxon's agreement to pay $1 billion to settle government claims and charges for the nation's largest oil spill could actually cost the company less than half that amount, an Associated Press analysis shows. The company's cost would be reduced if it chose to purchase an annuity that would guarantee the 10 future annual payments called for under the settlement in the Exxon Valdez case--a growing business practice. Exxon's cost would be further cut because most of the payments are tax deductible.
February 14, 2008 | Marc Lifsher, Times Staff Writer
Taking what they described as a significant step to protect senior citizens, state regulators have persuaded the biggest seller of annuities in California to promise to stop targeting the elderly with pitches allegedly designed to sell them pricey policies that could never pay off. The agreement between Allianz Life Insurance Co.
December 21, 2007 | From Times Wire Services
Three firms agreed to pay a total of $7.2 million to resolve claims that they charged excessive fees for annuities sold to seniors in California. The insurers "tricked senior citizens into buying annuities that would not pay out for years and had substantial early withdrawal fees," Atty. Gen. Jerry Brown said in a statement announcing an agreement with Family First Insurance Services and Family First Advanced Estate Planning, both of Woodland Hills, and American Investors Life Insurance Co.
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