Annuity Information

As asset protection planners, we don’t usually take a client’s wealth offshore without placing it in some type of insurance wrapper. An insurance wrapper is a term that refers to an insurance policy used as a vehicle or “wrapper” for other non-insurance purposes. In the offshore context, properly utilized insurance wrappers are very useful and have several benefits. First and foremost, foreign insurance wrappers give us a reason for why we take assets offshore. This is important because, in an asset protection context, it is always critical to have a reason for doing something other than just asset protection. The best plans have asset protection as an incidental benefit rather than a perceived primary objective. This is true even if asset protection is actually in fact the main reason for implementing the plan. This is due to certain nuances of fraudulent transfer law. Fore example, there have been court cases where a defendant stated that the primary purpose for their trust, LLC, or other structure was asset protection, and the courts ruled this ipso facto meant that any transfer into the structure was fraudulent.

Therefore, when a judge asks why you took $10 million offshore, the last reason you want to give is that you did it to thwart creditors. Foreign insurance policies are a good alternative reason for setting up an offshore entity because foreign insurers almost universally refuse to deal directly with a U.S. citizen. Instead one must set up an offshore structure and use it to buy the policy, which gives us a good non-asset protection “cover story” for why we set up an offshore trust, LLC, or other offshore entity. Putting cash in an offshore structure that then purchases foreign insurance also avails us the §8(a) UFTA defense against fraudulent transfers – a very important defense if assets are taken offshore after creditor threats have already materialized. We discuss using foreign insurance wrappers to avoid fraudulent transfer rulings in this book’s chapter on fraudulent transfers as well as the chapter “Asset Protection a Judge Will Respect.”

If we take assets offshore to buy foreign insurance, the next question we must ask is why would we buy foreign insurance in the first place? Why not just stay domestic? The short answer is a foreign insurance policy is a gateway to access international investments. Many of these investments are not available to U.S. persons, because most foreign securities are not registered with the SEC, and most foreign broker-dealers do not want to risk becoming subject to U.S. regulations and taxes. If a foreign insurance company buys those investments within a policy that is owned by your offshore structure, however, then the foreign dealers will have zero exposure to U.S. regulations.

Using a foreign insurance wrapper for international investing often provides tax benefits as well. For example, if a U.S. person directly purchases foreign mutual funds, these funds will usually be taxed according to §1291 of the Internal Revenue Code (IRC). Under IRC §1291, the best case scenario is you’ll be taxed at the highest ordinary income tax rate. The worst case scenario, depending on how long you hold on to the security, is you may pay a tax as high as 84%! The good news is investing through an insurance policy will legally avoid the heavy §1291 tax rates.

Furthermore, as with domestic insurance, offshore insurance may provide for tax-deferred or tax-free growth. For example, investments held in a foreign variable universal annuity (VUA) are tax-deferred until annuity payments are made (for individuals who want a guaranteed return, fixed rate foreign annuities are also available). Therefore, even if investments within the policy are sold, no tax is triggered if there is no annuity payout. Payouts or loans from foreign variable universal life policy (VUL) are tax free, and unlike with domestic VUL policies, annual returns of 10% are commonplace, and annual returns in excess of 20% are not unheard of. Many wealthy individuals use VULs for retirement income. If they borrow from the policy’s cash value (which grows according to the performance of invested premiums), the loan does not have to be repaid and is subject to very low interest (2% or so). If the loan is never repaid, the only consequence is a decreased death benefit. Using foreign VULs in this manner thus provides tax- free income in a heavily asset-protected foreign structure that is not subject to the ups and downs of a U.S. market or the progressively weakening dollar.

Foreign insurance policies typically have minimum funding requirements of at least a couple hundred thousand dollars, and are therefore more appropriate for the middle-upper class or high net worth individual. For those who are not able to make the minimum premium payment, there are other options. There are foreign stocks available through U.S. broker-dealers, although the selection is fairly limited relative to what’s available through a foreign insurance wrapper. Furthermore, foreign currencies may be bought and sold via a FOREX (foreign currency exchange) account, and one may of course purchase hard assets such as precious metals, real estate, and certain commodities that, unlike the U.S. dollar or domestic securities, are not at risk of being wiped out during an economic crisis.

Website: http://www.AssetProtectionAttorneys.com

In earlier articles, we’ve seen the benefits of structured settlement annuities over lump sum payments. For some, this protects them from the temptation of spending the bulk of their payment on unsound or unwise investments. Protection and incoming cash flow over the long haul are what structured settlement annuities provide. However, not every person faced with a lump sum payment necessarily will be tempted to spend the money rashly. Obviously, there are people who are savvy investors and think that given the opportunity with a lump sum payment over a structured settlement annuity, they will be able to make more money investing on their own.

With that in mind, let’s take a look how a structured settlement annuity compares with one of the most popular investment vehicles, the equity income mutual fund.

First, let’s look at who issues the annuity and the mutual fund.

A structured settlement annuity is issued by a life insurance company. An equity mutual fund is issued by and investment company that pools the assets of multiple investors in equity securities.

Next, let’s look at the long term capabilities of each to provide a lifetime income.

An annuity payment plan is created up front and is a predictable and dependable source of income that can not be outlived. A mutual fund can be a high paying investment. However it can also be highly volatile and unpredictable based on market conditions and can actually lose money and stop your earnings if the fund performs poorly.

What about guaranteeing the payouts?

An annuity is guaranteed by the issuer of the annuity based on the terms of the structured settlement. A mutual fund is solely dependent on market activity and thus can not be guaranteed.

What about costs?

The annuity has no cost associated with it. A mutual fund can be subject to a number of fees, like a sales load, yearly management fee, and marketing expenses. Even the lowest cost index funds have some costs associated with them.

What about keeping up with inflation?

A structured settlement annuity can have a cost of living adjustment incorporated into the annuity at the time it is designed. An equity mutual fund can outperform inflation based on how the underlying securities perform. However it is difficult to predict what the return will be and remember “past performance is not and indicator of future results.”

But what about the dreaded T-word….Taxes??

A structured settlement annuity is tax free as long as the money received is the result of personal physical injury or physical illness. As income is earned from an equity mutual fund taxes, capital gains, income etc, must be paid.

What about flexibility?

A structured settlement annuity payment amount and schedule may not be altered at any time. Conversely, money can be moved in and out of mutual funds. However, taxes, sales loads etc may be applicable with each transaction.

Michael DeGeorge has done extensive research on structured settlements and shares a wealth of information on his website [http://structsettle.gitgoingnow.com]. Download your free Structured Settlement Annuity information today from [http://structsettle.gitgoingnow.com].

There appears to be a belief that the battle between inflation and deflation is now won, the UK is now in an inflationary cycle. The current rate of inflation is near 5% as measured by the old, but still universally accepted, measure: RPI. Whether this is right or wrong and some still think the inflation/deflation debate is not concluded, the fact is that financial planners and their clients need to work out the effects on the client money, savings, pensions and their general plans that a sustained, possibly even growing, rate of inflation may have.

One effect is to accept that there cannot be any sustained period of inflation without the central bank (in the UK this being the Bank of England) raising interest rates and this could be soon and aggressive. There is now a possibility, maybe even a strong probability, that interest rates will rise and possibly significantly. Economic history is littered with examples of the macro-economic picture changing beyond recognition in surprisingly quick time. Interest rates are 0.5% (i.e. the bank rate) at the time of writing. Where will they be in a year, two tears, three years, no-one (literally no-one) knows. But could they rise to 3%? 5%? 7%? Yes, yes and yes. They could.

This is where one side effect needs to be considered. The people who are looking to buy an annuity in today’s environment could easily be sleep-walking into an expensive mistake. If interest rates rise then most people with savings will benefit, in the sense that the return on their money will go up. This may well be a false economy because if inflation rises quicker than the savings rate then the real rate of return will be going down but at least savers will see a nominal rise.

Most annuity purchasers however will not see any benefit, nominal or otherwise. This is because annuity buyers generally buy into fix rates at the prevailing rate. So someone buying an annuity today is likely to be fixing their lifetime income at today’s rate. Now imagine a scenario where someone does buy an annuity today, for example at a lifetime rate of 5% per year and then interest rates start to rise quickly shortly after their purchase. This person will not see any rise in their annuity rate, it was fixed (pegged, if you like) at the rate they bought at. We know that annuity rates rise as interest rates rise; this is one of the more secure correlations in the financial world.

It is perfectly feasible in a high inflation world that interest rates could increase quickly and that annuity rates could rise in line as a consequence. Could annuity rates rise by 50% in the next 3 years? Yes, they could. They might not, but they could. If this happened the 5% annuity rate would rise but not for the person who buys today and locks in for their lifetime. They will be getting their 5% forever.

The concluding point is this: does the average annuity purchaser, of which there are currently about 40,000 every month, consider the prospect that their purchase could be highly inefficient and that they may be buying low – which in annuity terms is not good? Does this annuity purchaser know there are other options? Does this person know that they can buy into annuities which are not pegged or that there are alternatives which allow them to get an income now but defer their decision on the fixed rate until a later date? These alternatives exist and now will be a very good time for those looking to buy an annuity to start researching them.

FREE Guide on whether now is the right time to purchase an annuity! Click here [http://www.dmpfinancial.co.uk/index.php?option=com_wrapper&view=wrapper&Itemid=44]

Matthew Morris

DMP Financial

[http://www.dmpfinancial.co.uk]

Although the idea of facing a number of different options when it comes to your pension annuity may seem alien to some, it is an important issue as what you decide to do with your fund can influence how you spend your later years. Get it wrong, and you may end up with less of an income than you wanted. Get it right, and you may get the rest you deserve in complete peace of mind.

For those not in the know, you can currently turn the pension fund which you have been saving into an annuity option at the age of 50 at the earliest. Many people will decide to do something a lot later than this, but nonetheless you need to make a decision in time. There are many things you can do when the time comes to make your choice, and there are more options available than many people realise.

The entire pot of money you have put into a pension fund while working is not untouchable. You may decide to take what is known as tax-free cash. Quite simply this is a slice of the fund tax-free which you can then spend as you wish, but some of it will need to be left behind and turned into an annuity. This is where your options expand further.

In most cases whoever has been administering your fund will offer you a pension annuity deal, essentially turning your fund into a method of income for the rest of your life. But this is not the only option and you are free to shop around a number of different providers who may offer different packages at different values. Your right to take this route is known as the open market option or OMO, and fund providers are obliged to advise you of it and ensure you understand that other companies and annuity deals are available.

The open market option is something which was created by law and means you can shop around a number of providers. Some may offer you a lower income than others for a shorter period meaning there is competition for your cash. And some deals will be better than others. For example, one company might be able to offer you £9,000 a year for the rest of your life if you had a £100,000 fund. But another provider might be able to provide you with a £10,000 a year income for the rest of your life from the same fund.

Impartial financial advice is always a good idea when selecting a pension annuity as many different products are linked to investments and other variables. These are sometimes favoured by people who have other resources such as savings to fall back on if their investment doesn’t work out. There are also impaired or enhanced annuities which supply potentially superior incomes to people who have a reduced life expectancy due to health reasons. Whatever your situation, the annuity market may be broader than you first thought, all you have to do is choose the right way for you.

Steve Wright is Managing Director of YourPensionAnnuity.com an independent financial adviser specialising in retirement income advice and pension annuities

401K is a retirement benefit plan designed to safe money that can be withdrawn on reaching the stipulated maturity period. In other words, if you start saving early, you can build up a huge stock of cash that will make the after retirement days financially secure.

Now, the 401K also requires employer contribution. But, what happens when you switch companies? How to contribute to 401K in such case?

You take help of 401K rollover. Rollover is the process of shifting the funds into another investment program- either open an account in the new company or create an Individual Retirement Account. The transfers are usually tax free but ask the authorities if it is otherwise. According to new plans, one can directly transfer from 401K to Roth IRA during rollover. It gives the advantage of tax free distribution of funds.

Before opening a new account with 401K rollover, it is necessary to review the offer document closely for knowing if there are any restrictions imposed. This will decide whether you need another 401K account or explore other investment options. If you want IRA option, then fill out the IRS 1099- R form before leaving present employment and the transfer is completed within 60 days. After the 60 day period lapse, decide on opening account with another financial institution.

401K rollover generates higher amount of interest but they are temporary accounts. Sooner or later, create a new permanent 401K account or IRA account. For finally depositing amount into new IRA, complete the 5498 IRS form fully and submit with the authorities. However, if you choose not to create either 401K or IRA account, the amount can be withdrawn but there will be heavy taxes levied and 10 percent of the total amount charged and deducted as penalty for untimely withdrawal.

Pinky Savika has been writing articles for more than 5 years. Not only does this author specialize on the subjects of health, diet, fitness and weight loss, you can also look at her latest articles about 401K rollover [http://www.a401krollover.net] which give you information about 401k rollover, and Present Value Annuity which give you information about present value annuity.

Could you beat the pension companies at their own game by taking your own pension investment decisions? A growing number of Britons are opting to do just this through Self Invested Personal Pensions (SIPPs).

Although SIPPs have been around since 1990, in recent years they have become far more popular as savers aim to achieve the best level of pension income possible. Today, an estimated 70,000 SIPP plans exist in the UK with assets of over £14bn.

The main appeal of SIPPs is that they offer you far greater choice and more control over your pensions investments than traditional pension schemes. They can also work out cheaper too as you can save on management fees.

You can invest in most main asset classes through a SIPP, with the big exception of residential property. So while you won’t be able to include a buy-to-let flat or house in your SIPP, shares, unit trusts and commercial property are all eligible.

Property is one of the most popular investments for SIPP holders, who benefit by paying no income or capital gains tax on bricks and mortar investments, including offices, hotels, student accommodation, care homes, land and even prisons.

Think twice about property as a good potential investment before you act, however. It’s a high-risk move to invest a large portion of your pension in property as you’ll need a fair stash of cash to invest in a property directly through a SIPP. The most you can borrow through a SIPP to buy property will be 50% of the fund value: so if your pension pot totals £50,000, an extra £25,000 won’t buy you much.

And while you’re at it, it also pays to be clear whether a SIPP is right for you in the first place. Most commentators say they are suited to relatively sophisticated investors who want more of a say in where their money is invested and with larger than usual pension pots to invest.

Bear in mind also that the paperwork involved may cost more than an ordinary personal pension or stakeholder pension plan because each SIPP is unique to the individual. However, a number of packaged plans are available to streamline the process of setting up and running such schemes.

BeatThatQuote.com can help you find out whether a SIPP is right for you, says product director Sophie Neary. “You can use our Pensions Calculator at BeatThatQuote.com to estimate how UK SIPPs could benefit you. Alternatively complete a short form online and one of our advisors will contact you to compare your options and the possible advantages of saving for your pension through a SIPP.

“Remember that SIPPs are complex, so only fools rush in. It’s essential that you take expert advice before making any decisions. Our independent financial advisors are experts in UK self-invested personal pensions. Their advice is completely free and you’re not obliged to take it.”

Philip Smith writes for Beat That Quote on all loans and finance topics.

How Are Structured Settlements Structured?

The structured settlement is becoming one of the most common methods for individuals to secure payment from those lawsuits that they have filed and won. If you have been hurt or otherwise victimized and a judge has ruled that you deserve to be compensated for what’s happened, or the defendant is willing to work out compensation with you, a structured settlement may be one of the best methods for you to receive those funds. Understanding how they are set up and how they work for you is essential getting the funds that you need, the way that you need them.

Setting Up A Structured Settlement

A structured settlement is set up between you and the defendant, unless there is a court order ruling over it. Most commonly, you will want to set this up so that it benefits you and any needs that you may have. The good news is that these settlements are very flexible, allowing you to find the right method for your specific needs. This is one of the benefits that these settlements have to offer in fact.

The most common method of structured a settlement is also the simplest method for many. The amount that is owed to you is simply divided among equal monthly payments over a period of time which you both agree on. Other intervals can also be set up, depending on what’s the best option for the situation. You may get a monthly payment every month for the next 10 years, for example.

But, that’s not always the way that they are structured. For many, it becomes important to receive a larger amount of payout at specific times, perhaps at the end of the year to pay down any medical bills prior to the next year. A settlement can be structured so that the payout of extra funds can be sent at predetermined times as well.

For someone that is confined to a wheelchair or will need other equipment every few years, it may be important to have an additional amount sent to them at that point so that the needed purchases can be made specifically for one need. There are many different ways that these settlements can be structured to fit your own needs.

Since structured settlements are a voluntary agreement, you don’t have to agree to the terms that are set up by the defendant or their legal team. You can determine a better way for the funds to be sent to you over a specified amount of time. The goal is to find the solution that fits you the best.

Working closely with your attorney is one of the best things that you can do when it comes to understanding how structured settlements work. If you have questions, make sure to ask. In addition, if you have any concerns about the methods that will be used to structure your settlement, get clarification so that you can find yourself in a better position for making decisions regarding your compensation. In this manner, a structured settlement can be an ideal method for being compensated.

Full Disclosure: I am not licensed or trained as an attorney or an annuity agent. Please consult appropriate professional assistance before making any financial or legal decisions.

Amanda Bellview writes to expand the question base of financial shoppers looking for cash via selling their structured settlements [http://www.ppicash.com], annuity payments, or other means of getting cash now for today’s needs.

Retirees who want to count on a reliable income may be better off using annuities than CDs. The advantage of using an annuity over a CD is that a deferred annuity grows tax-deferred, and immediate annuity payouts are only partially taxed. All a CD’s income is taxed as earned. Here’s a way to take advantage of the annuity’s tax break to give you more income throughout your retirement years.

Let’s suppose you have $100,000 for earning income using a Certificate of Deposit (CD) or an annuity. Let’s compare how you can receive income from them if they both earn at a 5% annual rate. A $100,000 5yr-CD pays you 5% for an annual taxable income of $5,000. At a 25% income tax rate, you’re left with $3,500. Of course you’re also left with your $100,000 too, to reinvest later. If income rates increase, your net income will too – and vice versa.

Now because an immediate fixed term annuity pays out both a portion of its earnings and your invested principal, you get more back during the year for an annuity earning 5%. So a Single Premium Immediate Annuity (SPIA) based on investing only $20,000 and a 5 year certain payout gives you $4,248 income. After tax (25% income tax rate) that still leaves you $4,186 which beats out your CD net income of $3,500. But, of course, all the money in this SPIA is gone after the 5 years of payouts because you received your principal as part of its payments.

But if you use the remaining $80,000 to invest in deferred annuities in the meantime you can come out ahead in the end. Here’s how….

*An approach of laddering annuities:

I’ll assume you’re 70; and with your $100,000, you buy 5 annuities each for a single premium of $20,000. The first will be a Single Premium Immediate Annuity (SPIA) for a 5 year payout term as mentioned above. The four others will be Single Premium (of $20,000 each) Deferred Annuities (SPDA) geared to produce a payout after 5, 10, 15, and 20 years respectively.

I’ve assumed a hypothetical accumulation interest rate of just 4.5% – safely under the CD’s 5% rate. And I’ve kept the rate constant over time as a neutral scenario. Increasing (decreasing) rates would affect both the annuities and the CDs together

Let’s consider what sort of income you’ll generate under this arrangement. These are hypothetical examples and all fees have been ignored. The SPIA 5 year certain payout nets you $4,186 which beats out your CD net income – but those other 4 Deferred Annuities of $20,000 premiums each are still growing. The (neutral) projected values of the 5, 10, 15, and 20 year SPDAs would be $24,924; $31,059; $38,706 and $48,234 when they become due as you turn 75, 80, 85, and 90 respectively. The projected income they’d produce – as an SPIA – would be $5,292; $6,600; $8,220 and $10,248 during their 5 year term payout. So your income is growing over time.

Now, to not lose all your investment if you live too long, you can – at age 85 – convert that $38,706 into a life-time single premium annuity that will pay you $6,348 per year for as long as you live and leave the last deferred annuity to grow as a legacy for your beneficiary.

Or you can just convert the last deferred annuity to a lifetime immediate annuity for even more income. Remember, an additional advantage of a lifetime annuity is its payouts increase with your age since your remaining life expectancy is decreasing.

So you can see that the payout characteristics and taxation of annuities can work to your advantage as compared to using a CD.

Shane Flait helps you with your financial legal, tax, and retirement goals.
Get his FREE report on Managing Your Retirement => http://www.easyretirementknowhow.com/FreeReportandSignUp.htm
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In the UK, at least one in every three individuals may be eligible for a higher income when they retire. But, this is only possible if you buy an annuity that will pay out a higher income depending on your health conditions. If you have poor health condition, you may be eligible to sign up for enhanced annuities, but the problem is that most people are still not aware of what enhanced annuities are and what it can do for them. Lack of awareness on annuities in general has resulted in a large number of people missing out on important potential income post retirement. Annuities help secure for retirement and it is important that everyone is aware of the different types of annuity options they have.

One of the most important types of annuities for those in poor health conditions is enhanced annuities. It works on the basis that an enhanced annuity policy holder will have a shorter life span than an individual who is in a better state of health. This means that the person with poor health condition will be using up his pension fund more quickly and he will be receiving more money by the insurance company every year.

The annuity rate that an individual gets depends on his lifestyle and age. Those who are in poor health can get access to extra cash by purchasing enhanced annuity that is not offered by all providers. There are also impaired life annuities available which are similar to enhanced annuities.

Impaired-life annuities

This annuity product pays out larger amounts to people who are suffering from health problems such as high blood pressure or heart diseases. The amount paid depends on individual circumstances. Providers will consider all the aspects such as your personal situation and health conditions before providing an impaired-life annuity package. For example, if two people suffer from heart diseases, the type of enhancement they receive may differ. It will depend on the type of disease they are suffering from.

Enhanced annuities

This annuity product is less tailored than the impaired life annuities and pays a higher rate to people who have particular lifestyle such as those who are smokers or those who are obese. In such cases, it is usually assumed that you will have a shorter life span and as a result, the providers will pay you more until the time you are around.

Seeking advice

If you think you would like to purchase enhanced annuity just because you have a certain lifestyle or you are suffering from some kind of health problem, it is advisable to consult an independent financial advisor. This decision is probably the most important decision that you will be taking regarding your retirement and this decision will determine the guaranteed income that you will receive post retirement.

Tips when seeking advice

- If you are seeking advice from a financial advisor, make sure that your advisor tries to find out as much as possible about your health conditions. If your advisor does not ask you questions about your health, he is not a specialist and you should not put your trust on him.

- There are no best insurance providers available so you must make sure that your financial advisor searches the market for every insurance company that provides enhanced annuity.

- Even if you are in good health, you may be eligible for an enhanced joint income if your partner is in poor health.

Are you confused about how to choose the best annuity to secure your retirement? Visit out website and you will find heaps on valuable information on the best enhanced annuities

An annuity is an asset that offers a definite cycle of payments in the future in exchange for an immediate sum of money. An annuity maybe purchased to facilitate an immediate or deferred payout and could be of a fixed or variable investment type. An annuity may be self-purchased, a gift or even an inheritance. An annuity can be considered a safe source of income, especially after retirement.

However there are times when one needs to have real money in hand to meet expenses rather than documented and sealed bonds. One needs to have control over ones complete monetary resources to meet continuously varying requirements. Selling some or all of ones annuity payments provides flexibility to instantaneously use ones money according to personal needs.

Certain businesses buy annuities from investors in need of physical money. This process is known as selling annuity payments. When an investor decides to trade annuity, the buyer offers a bargained lump-sum imbursement based on the complete present assessment of an annuity contract. The buyer may also offer a portion of the future annuity payments, depending on how much annuity one decides to sell.

While customary annuity payments may be the right choice for the original proprietor, they might not suit the person receiving them as a gift or inheritance. Selling some or all of ones annuity payments gives one the opportunity to use the money to its full potential. Trading annuity may also involve buying another annuity in exchange, which is more suitable to a buyer’s needs. If one owns a fixed annuity, there is a prospect for one to sell some or all of the annuity payments. As such, if annuity contract is over a period of twenty years, one can sell a fraction of the annuity payments from the 20-year component, while still preserving the assured lifetime proceeds.

Most plans for selling annuity payments are customized, which enables the people involved to determine how much is to be paid on an individual basis. There are many variables involved. These include fiscal rating of the insurance company making the payments, the volume of ones deal and how far into the future the costs expand. These factors collectively help establish the amount one will receive. When selling annuity payments, financial experts should be consulted, as it can be a complex process.

Sell Annuity provides detailed information on Sell Annuity, Sell Annuity Payment, Sell Annuity Settlement, Sell Health Annuity and more. Sell Annuity is affiliated with Annuity Leads [http://www.e-sellannuitypayments.com].