Variable Annuity Comparison

Sam Jones plans to retire at age 65. He wants to supplement his retirement by buying an annuity that will provide $2,400 each year for 10 years. If money is worth 8% compounded annually, how much will Jones have to pay for the annuity at age 65?

My husband and I are frugal, and we love to save as much as we can. I max out my 401k yearly, but my husband’s employer doesnt offer any retirement benefits so we max out our IRA’s. We started to save $10K a year and put it in an emergency fund. However, we still have $3K a month to save. Where should we invest it? Our net worth is less than $500K, and we make gross $150K/year combined and no kids yet. A financial advisor suggested putting the extra $3K a month in a variable annuity or stocks, but didnt suggest CD/Treasury Bonds, etc. What’s the best financial wealth strategy for a couple in their mid 30’s?

I have been advised that it is better to transfer title of my variable annuity into my living trust. I have also been told to just make the living trust the beneficiary of my variable annuity. I live in California. Can you point me in the right direction.

My mom passed away and left a will and different annuities bank accounts and bonds. She left monies to 6 people in different percentages according to the will. However, when she also listed us as benefactors on the accounts and annuities at different percentages as the will. What does the executer go by? The will split or the bank benefactor split which is different. Can the executer decide arbitrarily or is there a law guideline to govern this?- Thanks.

a. Consumer Price Index.

b. Standard and Poor’s 500 Index.

c. annuity unit.

d. accumulation unit.

1 John and Mary C were a middle-aged couple in the midst of planning for their retirement. John was 55 and had decided to put the maximum ammount $2000 into an IRA account for the next ten years. He was planning to retire at 65. The couple felt they they should make arrangements for the following twenty years and not concerned about planning beyond the age of 85. They wanted the funds that accumulated in the IRA to purchase a 20 year annuity. They had one child, whom they wished to leave or give $50,000 when they reached 85.
Based on the investment opportunities available, Larson felt that a 13% interest rate should be used in evaluating their situation. The couple was concerned about how much of an annuity to purchase at retirement that would still leave enough in their investment to grow to $50,000 in twenty years.

2. Ansel and Harriet W were a young highly educated professional couple both employed by one of the leading resort hotels in the area. They were planning on saving for a new house which they expected to purchase in seven years. In addition to that financial retirement, they felt that Harriet would quit working at that time to care for their expected family, and that the loss of her income would make them unable to keep up payments on the house without an annuity to supplement his income.
The couple felt that they needed $1500 a year in supplemental income beginning at the end of the eighth year to assist with the house payments, and that they needed this for each year of the next thirty years. They also wanted to have $50,000 With which to make the down payment in 7 years when they planned to buy the house. As both were working, they had plenty of funds for savings and were wondering how much they should put away at the end of each of the next seven years to be able to make the down payment and buy the annuity. Larson felt that an 11% interest rate applied to their situatution.

My 80-year old mother’s financial advisor just sent me this email. A few years ago he recommended an annuity, so I’m not sure I can trust his advice. What do you think he intends to do, and is it reasonable?

I would suggest that we move 100K of the almost 400K that will be earning 4.1% in her savings account. My recommendation would then be to allocate 40K into each of the two programs that I would recommend. One is yielding 6.2% and the other 6.3%. We would leave the remaining 20K in money market (currently earning 4.5% but will fluctuate and is subject to change as rates change). My objectives for these investment recommendations are preservation of principal, steady income, and capital appreciation on the back end of the program. Our total return target over the life of the program is an annualized total return of 9% -10%. There is no commission, load or ongoing fee paid by the client to go into these programs so the yield is a net yield.
Thanks for everything so far! Here’s more:
There are several investment programs with which I work that are direct investment programs that are non-correlated to the stock market or to the bond market, are non-traded and therefore do not change in value (share price is stable at $10.00) and are earning yields of 6.2% and 6.3%. We can re-invest the dividends or have the dividends swept into a money market.

construct an annuity table showing the deposits and balances for the given plan
1. $1000 is invested in an ordinary incresing annuity at the end of each year for 5 years. the annuity pays 8% compounded annualy

Ok, I want to take money from my annuity to pay the IRS . I already called the IRS ,interest and penalties will kill me otherwise. I’d only be able to pay $25.00 per mo. I owe $2,232.00
Would this be considered income for next year? Will I have to pay income tax on it? Even though I”m going to use it to pay what I owe the IRS for the tax year 2008? HELP!
I got a settlement which kicked up my income,the money I set aside to pay the addl taxes.
I had to use to fix my car UGH!!!!