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For the Baby Boomers and Midlifers, this October – the Month of The Harvest Moon!: The focus is on Planning for Retirement. We’re talking about finance, and lifestyle choices. Planning for those days when after all your hard work you can “harvest” the rewards – whether that means travel, time, golf, or doing just what you want with your life. Annuities are just one of the many investment vehicles you can choose to help build up your retirement fund.

Guest author Scott McQuarrie shares some advice

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Annuities – Worth Another Look

Annuities – Worth Another Look

Guest Author: Scott McQuarrie

Use the words “insurance” and “investment” in the same sentence these days and most people will think of some pretty negative things, like the government bailout of the huge insurance firm, AIG. Despite the bad publicity, however, insurance is still one of modern life’s basic needs. And insurance companies still offer interesting ways to protect your money as well as your life, health and auto. Annuities are a perfect example.

Annuities are very interesting financial instruments, and one of the main products of insurance companies. Essentially they are “future repayment” contracts between you and an insurance company, which you fund with either a single lump-sum payment or scheduled remittances in advance of the first payout date. The insurance company agrees to make periodic payments of a certain calculated amount, according to an agreed-upon schedule.

Annuities usually feature tax-deferred earnings and might also contain death benefits. Since it is not a replacement for life insurance, the amount that it will pay the beneficiary is some guaranteed minimum amount, often the total of your initial pay-in amount.

Kinds of annuities Generally speaking, there are two types of annuities, fixed and variable. Fixed annuities earn a specified minimum rate of interest while your account is maturing toward its payout date. The insurance company will then guarantee that the periodic payments will be a specified amount for each dollar in the account, payments that could last for either a defined period (15 or 20 years) or for indefinite periods like your lifetime or your spouse’s.

When you opt for a variable annuity, you can select from among various different investing options, mostly mutual funds. The amount you eventually receive will depend on the returns earned from the investments you selected.

Equity-indexed annuities are where the insurance company credits you with a rate of return based on changes in an equity index like the S&P 500 Composite Stock Price Index. Most insurance companies will guarantee a certain minimum return, which rates vary greatly from firm to firm. Following the accumulation period, you will receive periodic payments according to your contract terms, unless you prefer a lump sum payment.

The legal distinctions Each annuity product is a different kind of financial instrument. Fixed annuities are not considered securities and therefore are not regulated by the Securities and Exchange Commission (SEC). On the other hand, variable annuities are securities, so the SEC does exert some oversight of those products. Equity-indexed annuities combine features of other, more traditional insurance products (like a specified minimum rate of return) as well as standard securities (return pegged to the markets).

Because they are constructed in different ways, even within the same company, equity-indexed annuities may or may not be considered securities. It is all according to their particular design. Most equity-indexed annuities marketed today, as a matter of fact, are not registered with the SEC. This means it is more important to check the company, its history and its own financial health if you are going to risk your money on its products.

Fitting into the plan

You can learn more about all the kinds of annuities by doing online research, as well as ordering information from the various insurance companies that deal in the products. A good financial planner, especially one who is also a licensed insurance agent, will be able to help you determine just how you can work an annuity into your financial formula. Again, it is up to you to determine the amount of risk you can stand, and the way you want to structure the deal, because there are no concrete guarantees in any financial instrument, truth be told. The history of annuities, however, should give one sufficient confidence to proceed if everything – the company, the people, the deal, etc. – checks out.

One primary challenge in creating a comprehensive financial plan is making the best use of your funds and limiting the amount of overlap in benefits. That is, if you have other income-producing investments, you don’t need to use annuities for the majority of your future living expenses. Instead, if you anticipate paying for college for a kid or two, you could set up an annuity for that purpose, or according to some other plan that you develop. You can use annuities as a component of various, very effective financial plans, so don’t overlook them.

By Scott McQuarrie, representing the EZWatch Pro brand, a leading provider of computer based video security systems for business, commercial and government applications.

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For the Baby Boomers and Midlifers, this October – the Month of The Harvest Moon!: The focus is on Planning for Retirement. We’re talking about finance, and lifestyle choices. Planning for those days when after all your hard work you can “harvest” the rewards – whether that means travel, time, golf, or doing just what you want with your life. Do you have to do this all on your own? When is the right time to get some objective financial advice?

Guest author Mika Hamilton shares some advice

. . . . .

Should You Hire a Financial Advisor or Go It Alone

By Mika Hamilton

One of the most common questions asked by beginner investors is “Do I need to hire a financial advisor?” Before you can answer that question you need to ask yourself “How much can I improve my financial situation?” You can pay your bills on time, do your own taxes, and you may even have life insurance.

You may feel you are doing a good job handling your personal finances and do not feel you want to spend your time and money on a financial advisor. Financial advisors may not know better than you how to utilized your money in the most appropriate ways. However, they are aware of financial opportunities, tools, and how to use them. They can help you develop a solid well researched financial plan which will create more money for your family, allow you to handle life changes easier, and help protect you against disruptions in the stock market.

Financial investment professionals can help you achieve peace of mind and confirm choices, you feel are correct, in building your investment portfolio. A financial plan helps you to ensure future wealth and comfort. To obtain and maintain your desired lifestyle you must set personal and financial goals which are achievable. People who choose to invest without a financial planner often set impossible goals and get frustrated when they are not meeting them.

You must assess your current financial situation including your assets, income, liabilities, insurance, taxes, and estate. Then you must pin point your financial weaknesses and work to make those areas stronger. Once you have a financial plan you must be able to monitor it regularly. When changes occur in your family (like a new edition), career, or economy – you must adjust your financial plan to continue to meet your established goals.

Can you go it alone? Only you know the answer to that. If the above discussion has made you queasy and overwhelmed then you need to hire a financial planner to help you design and stick to an effective financial plan. However, if you already have a financial plan in motion and it is creating, for you, the financial stability you want – let it keep working for you. As alternative to hiring a financial advisor you can periodically check in with a financial advisor. Most advising companies offer consultations for a moderate price and will help you flesh out and troubleshoot your personally designed financial plan.

Visit the Global Investment Institute and signup for our free Investing For Beginners E-Course at http://www.Global-Investment-Institute.com Investment webmasters or publishers, please feel free to use this article provided this reference is included and all links remain active.

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For the Baby Boomers and Midlifers, this October – the Month of The Harvest Moon!: The focus is on Planning for Retirement. We’re talking about finance, and lifestyle choices. Planning for those days when after all your hard work you can “harvest” the rewards – whether that means travel, time, golf, or doing just what you want with your life.

Guest author Tyrone Charles Solee shares what NOT to do.

. . . . .

9 Retirement Planning Mistakes

Guest Author: Tyrone Charles Solee

Retirement years are one of the best years in one’s life most especially if you’ve already worked for almost all your entire life. It’s the time to savor the fruits of your labor. It’s time to relax, to free yourself from worries and enjoy the remaining years of your life.

Most people commit mistakes in planning for their retirement years. In the end, they have not successfully retired themselves from work and would either depend on the income of their children to support their needs.

Here are some of the most common retirement planning mistakes people commit:

Depend on the government. The biggest faulty assumption most people commit is that social security and Medicare will take care all of their financial and medical needs in retirement most especially to those citizens of First World Countries that gives huge subsidies to their locals. Definitely, here in our country, you shouldn’t be relying to these government aided benefits as these are not sufficient to sustain your needs during retirement.

Fail to set a goal. If you are serious in planning for your retirement, then set a goal on how to achieve it. A lot of people have never done a calculation to see how much money they will really need to live in retirement. People often overestimate how much annual income their nest egg will provide.

Expect a short retirement. Typically, people underestimate their longevity, how much money they’ll actually need in retirement and at what age they are eligible for full Social Security benefits.

When planning for your retirement, don’t assume that you’ll die soon. I’m not really sure as to what age most men and women die on average but I think nowadays, women have longer life span than men. Possibly, consider living at most up to age 80 for men and 90 for women.

Overlook medical costs. Many people feel that their employer or Medicare will take care of all of their retiree medical needs, including long-term care. The truth is that most of us will be responsible for our own medical care costs after retirement. Unplanned-for medical bills can wipe out a retirement nest egg in a fairly short time.

Forget about inflation. When planning for retirement, don’t forget to consider inflation. Because of inflation, your money will buy less in the future. You must therefore plan saving and investments accordingly.

Underestimate taxes. Don’t underestimate taxes when you retire. It does not mean that when you retire, you can now totally get rid of taxes which used to eat up a portion of your income when you’re still working.

Carry too much debt. Large amounts of debt can torpedo savings efforts. You may earn 6% on your savings, and yet you may pay 10% on your debt.

Expect to keep working. Many people assume they’ll be able to work forever. Yet many retire earlier than planned due to company downsizing or medical problems. So don’t expect that you’ll be able to work forever.

Wait to start saving. The longer you wait to save, the more you will need to save each year. It’s not impossible, but you may need to save a lot more money and retire later than you’d hoped.

So plan your retirement properly and avoid these retirement planning mistakes.

Tyrone Solee is a personal finance blogger with interests on entrepreneurship, personal finance, investments, and self-motivation in order to achieve success and financial goals in life. Visit: http://www.millionaireacts.com

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