Increase Your Retirement Income Now -- And Sleep Better 

(ARA) - Do you depend on your CDs or IRAs for a portion of your retirement income and cannot settle for less? Are you concerned about increased living and medical expenses while interest rates and the stock market continue to be volatile? These possibilities are prompting many retirees to consider an immediate annuity in order to assure a steady stream of income. Also known as a current income annuity (CIA), it is sold by several large insurance companies, and provides income that you cannot outlive. 
Current income annuities can work in tandem with assets like CDs or IRAs. Regardless of the amount you have in your IRA, you may prefer a CIA for one of four reasons. 

1. Payouts from an IRA CIA, in most cases, are substantially greater than required minimum IRA custodial distributions starting at age 70 1/2. 

2. Variable bond or stock sub-account CIAs can be selected (giving you the opportunity to invest in stock or bond accounts). However, if a fixed payment CIA is used, payments will be predictable and stable. This is very important in today's volatile economy, particularly if payouts are necessary to cover living expenses and other obligations like life insurance or long- term care premiums. 

3. Cost of living benefits can be added to a CIA to help keep up with inflation. 

4. Whether an IRA or not, the CIA annuitant (person or persons receiving the periodic payments) cannot outlive the annuity payments. 

On the other hand, individuals who prefer to maintain total control of their IRA, yet are interested in one of the above benefits of CIAs can consider placing part of their IRA custodial account into a Current Income Annuity. 
 

Making a current income annuity part of their retirement planning makes sense for many people. Yet, a majority of financial counselors and clients know very little about CIAs. "Once my clients see the comparison of CIAs versus CDs or IRAs, they typically have one of three reactions," says financial planner Jim Pedigo. 

"The first is 'this sounds great -- I need more guaranteed income that I cannot outlive.' Second, clients who have sufficient income say 'looks good, but I want to make sure there is something left for my heirs.' The third reaction is 'I don't want more income. I don't want to pay more taxes. I don't even need this IRA, but I'm forced to take out income,' explains Pedigo." A CIA can address all of these concerns. 

While buying a CIA means turning over a hefty lump sum of your nest egg to an insurance company, it can be a good choice for those looking for a guaranteed income during their retirement years. "Very few people have pensions anymore," says Pedigo. "CIAs can fill this gap." 

For those concerned with passing wealth along to their heirs, consider the following example: Based on a CIA with November 2002 rates from Fidelity & Guaranty Life Insurance Company in Baltimore, a 70-year-old male with a $100,000 IRA and a 50-year-old son could see total income of $250,000 or more paid over their joint lifetimes. It is important to note that payouts vary by age and interest rates in effect at the time of issuance of the annuity certificate. 

Everyone is required by law to take minimum distributions from their IRAs at age 70 1/2. For Individuals in the third group, those who don't need that money to live on, but who are mandated by law to withdraw the money from their IRA, investing in a CIA can give them more control over how their IRA money is allocated. 

The current income annuity is a retirement planning tool that allows you to maximize your retirement income or maximize what you pass on to your heirs or both. A knowledgeable financial planner can help you decide how to put this option to work for you. 

Dreams Are for Passing on to Your Children -- Not to the IRS
(ARA) - Do you depend on your CDs or IRAs for a portion of your retirement income and cannot settle for less? Are you concerned about increased living and medical expenses while interest rates continue to be volatile? These possibilities are prompting many retirees to consider an immediate annuity in order to assure a steady stream of income. Also known as a current income annuity (CIA), it is sold by several large insurance companies, and provides income that you cannot outlive. 
Current income annuities can work in tandem with assets like CDs or IRAs. Regardless of the amount you have in your IRA, you may prefer a CIA for one of four reasons. 

1. Payouts from an IRA CIA, in most cases, are substantially greater than required minimum IRA custodial distributions starting at age 70 1/2. 

2. Variable bond or stock sub-account CIAs can be selected (giving you the opportunity to invest in stock or bond accounts). However, if a fixed payment CIA is used, payments will be predictable and stable. This is very important in today's volatile economy, particularly if payouts are necessary to cover living expenses and other obligations like life insurance or long- term care premiums. 

3. Cost of living benefits can be added to a CIA to help keep up with inflation. 

4. Whether an IRA or not, the CIA annuitant (person or persons receiving the periodic payments) cannot outlive the annuity payments. 

On the other hand, individuals who prefer to maintain total control of their IRA, yet are interested in one of the above benefits of CIAs can consider placing part of their IRA custodial account into a Current Income Annuity. 

Making a current income annuity part of their retirement planning makes sense for many people. Yet, a majority of financial counselors and clients know very little about CIAs. "Once my clients see the comparison of CIAs versus CDs or IRAs, they typically have one of three reactions," says financial planner Jim Pedigo. 

"The first is 'this sounds great -- I need more guaranteed income that I cannot outlive.' Second, clients who have sufficient income say 'looks good, but I want to make sure there is something left for my heirs.' The third reaction is 'I don't want more income. I don't want to pay more taxes. I don't even need this IRA, but I'm forced to take out income,' explains Pedigo." A CIA can address all of these concerns. 

While buying a CIA means turning over a hefty lump sum of your nest egg to an insurance company, it can be a good choice for those looking for a guaranteed income during their retirement years. "Very few people have pensions anymore," says Pedigo. "CIAs can fill this gap." 

For those concerned with passing wealth along to their heirs, consider the following example: Based on a CIA with September 2002 rates from Fidelity & Guaranty Life Insurance Company in Baltimore, a 70-year-old male with a $100,000 IRA and a 50-year-old son could see total income of $250,000 or more paid over their joint lifetimes. It is important to note that payouts vary by age and interest rates in effect at the time of issuance of the annuity certificate. 

Everyone is required by law to take minimum distributions from their IRAs at age 70 1/2. For Individuals in the third group, those who don't need that money to live on, but who are mandated by law to withdraw the money from their IRA, investing in a CIA can give them more control over how their IRA money is allocated. 

The current income annuity is a retirement planning tool that allows you to maximize your retirement income or maximize what you pass on to your heirs or both. A knowledgeable financial planner can help you decide how to put this option to work for you. 

Articles Courtesy of ARA Content 

EDITOR'S NOTE: For more information about IRA distributions, a Current Income Annuity, or for the name, address and phone number of a financial representative in your geographic area, please call or email Jim Pedigo, ChFC, AEP, CSA Financial Rate Watcher$, Inc., Longwood, Fla., (800) 633-7966, local (407) 333-3330, e-mail: frwannuity@aol.com. 

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Related:
Annuities > Overview
http://personal.fidelity.com/products/annuities/income/income_intro.shtml
Annuities > Income Annuity Types 
http://personal.fidelity.com/products/annuities/income/101.html

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Plan Your Estate, or the State Will Do It For You 

(ARA) -
There are certain things that you must do to take care of yourself and your family. One such responsibility is planning for what will happen to your assets when you die. While it may be something most people don't like to dwell on, everyone needs an estate plan. An estate plan is a blueprint for making your assets last over your lifetime, as well as for making sure that whatever is left passes along according to your wishes, and in a way that leaves more to your family and less to Uncle Sam. 
If you die without a will, or "intestate," the division and distribution of your estate is governed by your state's law of descent and distribution, which means that the state decides what happens to your property. The chance that the state's mandate matches what you would do is slim. 

For example, state law usually does not recognize the different needs of your children nor their stage in life. Most families have children with unequal needs, capabilities and requirements for care based on their age, health, education and growth. This is particularly true in blended families. 

If you have minor or disabled children, do you really want the probate judge appointing their guardian? Chances are you have definite ideas about who you would like to raise your children if you can't do it. But that won't happen unless you make your choice known in a legally binding document. 

However, estate planning encompasses much more than a will. You should also consider a durable financial power of attorney and medical power of attorney. In the event that you become incapacitated, either mentally or physically, these documents authorize someone you trust, such as your spouse or adult child, to act on your behalf. 

You may also want to consider a living will, a document that says you want the right to die a natural death free of all costly, extraordinary efforts to maintain your life when it can only be sustained by artificial means. It makes such decisions easier on the doctor, the hospital and your family. Used in conjunction with a medical power of attorney, this tool can spare your family a painful, drawn-out and costly process. 

It may all sound overwhelming at first, but there are many professionals trained and qualified to help you make your estate planning effective. Check with your state or local bar association for a local Certified Estate Planning attorney, or try the state CPA association. The National Association of Estate Planners and Councils (NAEPC) offers a list of members who have earned the special designation AEP 
(Accredited Estate Planner). 

Estate planning is appropriate at any stage of life -- if you don't prepare for the inevitable, you may create needless heartache and loss for those left behind. Your estate plan should allow you to give what you want to whom you want to receive it, the way you want them to receive it and when you want them to receive it. Your estate plan should save every tax dollar, professional fee and court cost that is legally possible to save. Use good estate planners to ensure things work the way you want. 

For more information on the National Association of Estate Planners and Councils, or to find an Accredited Estate Planner (AEP) near you, visit www.naepc.org or call NAEPC toll-free at (866) 226-2224 for suggestions. 

Courtesy of ARA Content 

EDITOR'S NOTE: The National Association of Estate Planners and Councils (NAEPC) is a national organization of professional estate planners and affiliated Estate Planning councils focused on establishing and monitoring the highest professional and educational standards. NAEPC offers public awareness of the quality services rendered by professionals who meet these standards. NAEPC builds a team approach involving cross-professional disciplines to better serve the public's need in estate planning. 

Other Estate Planning articles on the site:
Don’t Let Poor Estate Planning Tear Your Family Apart
An estate is more than just money

Five Reasons to Plan Your Living Will While You’re Still Healthy 

Don’t Take Your Estate Planning Lying Down

Wills 101: Everything You Need to Know but Don’t Want to Think About 
 
 

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