Retirement Rescue - Annuities (from Bankrate.com)

Check annuities for retirement rescue

By Melissa M. Ezarik • Bankrate.com


In a crowd of average Joes and Janes, you'll be hard-pressed to find anyone who knows a lot about annuities, but you'll likely find plenty with a generally negative feeling about them.

That connotation may be well-deserved, yet in today's volatile investment climate annuities might represent a safe haven.

Tom Warschauer, professor of finance at San Diego State University, says, "The insurance industry has not done a very good job recommending products that specifically fit their clients' needs. They look at what they want to sell and find a place for them in everyone's portfolio."

One big issue has been the lack of transparency about charges embedded in annuity products, and since it's difficult to decipher those costs, "There's a lot of room for abuse," says Warschauer, who's also a professor of finance and director of the Center for the Study of Personal Financial Planning at the university.

Beth Almeida, executive director of the National Institute on Retirement Security agrees. "The costs associated with the purchase of individual annuities eat away at the overall retirement nest egg. So a retiree may get a regular check, but their overall retirement income is diminished."

But in today's uncertain and volatile market, "retirees and near-retirees are likely seeking safe haven," says Almeida. And Warschauer agrees, annuities "have some very valuable uses in retirement planning" in this economic climate.

During your working years, return on investment is generally the primary focus. But in retirement, "the new ROI is 'reliability of income,'" says Robert E. Sollmann Jr., senior vice president of MetLife's Retirement Strategies Group.

"The painful lesson we are learning from today's market is that the conventional wisdom -- 'diversify' -- isn't cutting it. International, commodities, U.S. stocks are all down. The guarantees provided by annuities that can deliver regardless of market performance" are needed to balance a retirement plan, Sollmann says.

Think annuities may be worth a look? With so many annuity types, it's easy to get overwhelmed by possibilities. Here are some directions that experts say pre-retirees and retirees should consider.

Let's start with some basic definitions: Annuities are life insurance contracts sold by insurance companies, brokers and other financial institutions that provide a regular periodic payment to a policyholder for a specified period of time. They are paid for before retirement in exchange for lifetime payments after retirement and are intended to provide a regular level of retirement income to meet day-to-day living expenses.


They come in two general categories:


• Fixed annuity. The insurance company guarantees the principal pays a minimum rate of interest. As long as the company is financially sound, money in a fixed annuity will grow -- and not drop -- in value. The growth in value or benefits paid may be fixed at a dollar amount, at an interest rate, or by a specified formula. The interest rate usually starts out as a fixed percentage and is adjusted annually.
• Variable annuity. Your money is invested in a fund similar to a mutual fund -- but one open only to that insurance company's investors. The amount paid out depends on the performance of that fund.

"I'm a real advocate of fixed annuities," says Warschauer, who compares it to a fixed vs. variable mortgage rate. "It's obvious with a fixed mortgage you're more secure. When you're in your retirement years, you really want to be able to count on the cash in-flow, and the fixed annuity does that." Of course, the fact that it's fixed means it doesn't go up with inflation. His recommendation: Package a growth element within your IRA or 401(k), and then shift money out into immediate fixed annuities for daily living expenses.

On the variable annuity route, consider products that come with bonuses or guarantees such as living benefit riders, says Bayne Northern, a national sales manager for Penn Mutual Life's Annuity Distribution System. Variable annuities that include bonuses "may actually 'replace' what you have just lost in the market."

But guarantees as part of a variable annuity come at an added expense, cautions Peter Miralles, president of Atlanta Wealth Consultants. In addition, he says, "Generally the guarantees are diminished when withdrawals are made while the market value is down."

Shaun Golden of Golden Wealth Management in Riverhead, N.Y., concurs about living benefit riders, which can be found in today's variable annuity contracts, offering a "lifetime of guaranteed income regardless of financial market conditions." Golden, who has positioned a portion of his clients' assets into these types of annuities, says he's getting expressions of appreciation for protecting "the income which we count on each month."

Sollmann says variable annuities with an income rider are worth considering for those who are still saving for retirement who want the potential to grow assets along with income protection, even in down markets.






More annuity choices
Among the many other annuities available:

Immediate (or income) annuity. Available as fixed, variable or a combination of both, the immediate annuity is designed to produce a stream of income soon after its purchase. This option would generally appeal to someone age 60 or older. Deferred annuities can be annuitized to become immediate annuities. Warschauer believes fixed immediate annuities are what near-retirees and retirees should consider first.

Deferred annuity. You give the company a large sum upfront or make monthly payments until you reach retirement age. The money grows tax-free until you retire. This works best for someone who has a big chunk of change to put down and at least 20 years for the money to grow tax-free before setting up a schedule of lifetime payments that would start after retirement.

Lifetime income annuity. This product provides income for the remaining life of a person (or people, if a two-life annuity is purchased), according to the Insurance Information Institute. The amount paid depends on age, the amount paid into the annuity, and (if it's a fixed annuity) an interest rate set by the company. David F. Babbel, professor of insurance and finance at The Wharton School at the University of Pennsylvania, says lifetime income annuities should play a substantial role -- 40 percent to 80 percent of retirement assets -- in the retirement arrangements of most people.

Inflation-adjusted annuity. This feature is one that is added to lifetime income annuities that protects one's purchasing power, regardless of whether inflation or deflation occurs, Babbel says, adding that only a handful of insurers offer this feature. He also suggests seeking an annuity with a preset annual rate of increase, such as 1 percent to 6 percent per year. As an alternative to the inflation-adjusted annuity, he suggests having a fixed immediate annuity with a deferred, flexible premium annuity as a supplement. The flexible premium annuity can be activated as needed, "and if inflation really takes off, you can use the flexible premium feature to increase the size of your annuity," he says.

Seek stability
A final word of wisdom that's especially important in today's market: Be careful whom you do business with. "An insurance company can go out of business," points out Warschauer. "There is no guarantee that if a company goes out of business, they won't take the variable annuity or fixed annuity holders with them."

That's why it's worth taking the time to do some research to find out how solid a company you're thinking of buying from. Check out:

A.M. Best WWW.AMBEST.COM
Moody's Investors Service WWW.MOODYS.COM
Standard & Poor's WWW.STANDARDANDPOORS.COM
TheStreet.com Ratings (formerly Weiss Ratings) WWW.WEISSRATINGS.COM


According to Warschauer, Weiss has had a reputation for doing the best job in predicting failure in insurance companies, although users have to pay to access information. With national firms, he adds, a company being licensed in the State of New York is a good sign of stability, since their insurance commissioner's department is "probably the best known with being careful with regulations."

Regarding worries over financial stability, Warschauer points out that ordinarily the industry purchases each other's customers when a company goes under. "They will buy that package of annuities and take them over. But there have been cases where the annuities have simply failed." Conclusion: Annuities can be a rescue vehicle for many retirees -- just proceed with caution.

Melissa Ezarik is a Connecticut-based freelance writer.

From Smartmoney.com - favorite coupon websites

5 Best Coupon-Clipping Web Sites
Updated on December 11, 2008.

THESE DAYS, IT'S safe to assume that most consumers are looking to save a buck or two. And for a whole host of Internet entrepreneurs, that spells an opportunity.

A slew of new web sites offering coupons and online promotions are flooding the Internet. And while these sites offer a wide breadth of discounts, they're also causing a lot of confusion among shoppers, making it more difficult to weed out the really good deals from the duds. "There are hundreds, if not thousands of coupon sites out there offering the exact same thing," says Edgar Dworsky, founder of consumer advocacy site Consumer World1.

The proliferation of these sites isn't just about about saving shoppers money. As part of so-called affiliate marketing programs, retailers offer cash to these web entrepreneurs each time they get a consumer to make a purchase on their store's site. The enticement these sites use: coupons and other discounts. Each site uses a unique promotional code so the retailers know where the customer is coming from. Usually, though, that's the only differentiating factor among these discount sites. Most of the underlying deals are identical.

While choosing among hundreds of discounts may not seem like a bad thing at first, it's the relative sameness of these sites that makes it hard for shoppers to find the best deals and discern whether the offers they see are legit or not, notes Mary Hunt, founder of money management site Debt Proof Living2. Some have more extensive retailer partnerships and therefore offer a broader range of deals. Others are more diligent about updating offers and weeding out expired coupons.

We asked Dworsky, Hunt and other consumer advocates and deal hunters to point out the free coupon sites they turn to purchase after purchase. Here are five worth bookmarking:

Coupons.com3
Why the experts like it: Coupons.com offers as wide a variety of timely coupons as you'd find in the grocery shoppers' gold standard: the Sunday paper, says Dworsky. Phil Lempert, founder of news site Supermarket Guru4, praises the site's simple layout, which makes it easy to browse available coupons, and then print them out for in-store use. Enter your zip code for area-specific deals. There's just one minor drawback: "There are still some retailers that will not accept Internet coupons," cautions Lempert. Check that your supermarket does so before downloading the site's coupon-printing software.

Sample deal: Save $2 on two jumbo packs of Huggies Supreme diapers.

CouponCabin.com5
Why the experts like it: CouponCabin.com keeps its discount fare fresh, says Linda Sherry, a spokeswoman for Consumer Action6, a consumer advocate. Staffers update deals three times a day, and frequently check each coupon code to ensure it works. Sections for "most-used coupons" and "favorite deals" point shoppers toward the best ongoing promotions at online retailers. An added bonus: A weekly email newsletter alerts consumers to the latest deals every Monday.

Sample deal: Link to Eddie Bauer's (EBHI7) web site through CouponCabin.com and use coupon code "Perfect" at checkout to save 30% and receive free shipping. Offer expires Dec. 31.

CouponMom.com8
Why the experts like it: CouponMom.com covers a lot of ground, listing online coupon codes, printout coupons and free samples, among other types of discounts. And while other sites are riddled with offers and banner ads, CouponMom.com's simple design makes finding discounts easy, says Garen Daly, host of Massachusetts-based radio show "Frugal Yankee." Deals are reliably accurate, too, adds Tawra Kellam, founder of frugal living newsletter Living on a Dime9. Members can find all available coupons from several sources using the virtual coupon organizer. Sign up for email alerts on sales at favorite retailers, or on a shopping-list staple like the kids' favorite brand of peanut butter.

Sample deal: Link to discount gift certificate site Restaurants.com through CouponMom.com and save an added 40% on any restaurant gift certificate order. (Shoppers pay $6 for a $25 gift certificate, instead of the regular — already discounted — rate of $10.) Ongoing deal.

RetailMeNot.com10
Why the experts like it: RetailMeNot.com's dedicated community is what makes this site stand out. Users indicate whether a discount code worked for them or not, helping shoppers quickly filter out bad deals, says Hunt. They also add comments, pointing out when a code last worked, or any strings attached. "It's pretty darn reliable," she says. Email alerts notify you when new codes are posted for your favorite retailers.

Sample deal: Save 20% off neighborhood car rentals from Enterprise using code "ETC7HC." Offer expires Dec. 20.

SmartSource.com11
Why the experts like it: SmartSource.com merges local store sales and a wide array of printout coupons and online deals to help consumers maximize savings, says Lisa Lee Freeman, editor in chief of Consumer Reports' ShopSmart magazine. The selection is great, and entering your zip code yields even more deals specific to your area. (As with Coupons.com, check that the supermarket accepts printout web coupons before downloading the software.)

Sample deal: Save $3 on Johnson & Johnson (JNJ12) Red Cross first aid products.

Also See:
5 New Ways to Clip Coupons13
How to Save on (Almost) Everything14
5 Ways to Save on Online Shipping Fees15

1http://www.consumerworld.org
2http://www.debtproofliving.com
3http://www.coupons.com
4http://www.supermarketguru.com
5http://www.couponcabin.com
6http://www.consumer-action.org
7http://www.smartmoney.com/quote/EBHI/
8http://CouponMom.com
9http://www.livingonadime.com
10http://www.retailmenot.com/
11http://www.smartsource.com
12http://www.smartmoney.com/quote/JNJ/
13http://www.smartmoney.com/deal-of-the-day/index.cfm?story=20080602-five-new-ways-to-clip-coupons
14http://www.smartmoney.com/deal-of-the-day/index.cfm?story=20080625-how-to-save-on-everything
15http://www.smartmoney.com/deal-of-the-day/index.cfm?story=20080715-save-on-online-shipping

URL for this article:
http://www.smartmoney.com/spending/deals/5-best-coupon-clipping-web-sites-23634/












Comments
Story Comments
5 Best Coupon-Clipping Web Sites
Coupon sites are everywhere. Here's where you'll find the best, most reliable deals.


User Comments

Posted 1:31 AM EST December 07, 2008Posted by: coupons
Nice list for those victims of the sotck market collapse. To save money I will also add http://www.allfreecoupons.com which has online promos and coupons as well.

Posted 3:41 PM EST November 07, 2008Posted by: mardomania
http://www.retailmenot.com is excellent. http://www.dealalert.com is another great coupon website as well.

Posted 11:47 PM EST November 03, 2008Posted by: kar3nm
You list some nice sites, however when I am looking for a coupon code I usually check out http://www.mrdealfinder.com first.

Posted 1:43 PM EST October 16, 2008Posted by: Momof6Boys
Without a doubt www.thecouponcupboard.com and www.grocerypricebooks.com. the second one just opened up a blog with freebies and giveaways! (i am pretty sure you can get there from the home page) currently she is giving away coupons for Free franks Hotsauce! How awesome is that!

Posted 1:39 PM EST October 16, 2008Posted by: pullshot
Thats a nice list of sites! Thanks! My fav has got to be http://www.dealstop.com .

Posted 1:38 PM EST October 14, 2008Posted by: betyboop5386
Thanks for all the great sites. But I allways check 'NaughtyCodes.com' whenever I order anything online. I have found numerous codes on there for discounts that are not on web pages.

Posted 6:06 AM EST October 03, 2008Posted by: Gospelgal
I have been trying now for a very long time to print online coupons. My mom is a huge user of coupons when she can find them especially if it's for a brand that she uses. Herein lies the problem, all of the software is geared for PC users only. No one has taken into consideration that some of us are Mac users. I have tried with one site to download the software that they said worked on Macs using Safari browser. I tried several times downloading, opening and trying to install-no use. If more of them would make a universal software that would allow me to print coupons directly off the internet, that would be my one high point of the day. My mom thinks I made all this up. NO mom, just can't anything to print!

Posted 2:53 PM EST September 28, 2008Posted by: kitty626
I'd like to also say that www.afullcup.com has saved me hundreds of dollars on my grocery and drug store purchases. The people there are so friendly and always willing to share in their great deals. If you're trying to save money, that's the place to be!

Posted 10:22 AM EST September 28, 2008Posted by: shadowchasy
Momof6boys......just which two sites are you referring too? you said that but didnt bother to give the names of the two sites you claim are bad.

Posted 11:04 AM EST September 27, 2008Posted by: Momof6Boys
I see 2 people here trying to plug the 2 worst coupon forums on the net. Both of them are over garbage in my opinion. They both are jam packed with so much advertising and 9 million forums you can't find where to put anything! Their users go off topic so much you have to scroll through 20 pages just to find what the damn thread is even about! the owner of one of those boards is just a sell out and the other is so stupid she has no idea how to market her board. The users are nasty snotty people and they both already have a click. So if your thinking of joining, don't bother, they won't even notice you unless your in the 'in group'. Yes like high school.

Posted 10:55 AM EST September 27, 2008Posted by: shadowchasy
These sites are nice, but if you haven't visited www.hotcouponworld.com you really need to try it out.

Posted 12:23 PM EST September 25, 2008Posted by: MelTravler
Many of these coupons sites are great, but i'm not a fan of using coupons. i especially don't like printing them out. one site texts to your phone which is cool. someone posted about Cityskoop.com which is not a coupon site but tells you which stores are having sales and other local business deals. i've been using that a lot because i don't have to print anything out

Posted 8:28 AM EST September 17, 2008Posted by: discounts
I have found that there is quite a few new coupon websites in the last year. One of my favorites is BargainCat.com, they have a lot of exclusive ones there and often before other sites get them.

Mike

Posted 3:10 PM EST September 16, 2008Posted by: sunbare40a
CouponMom.com DOES TOO have tons of popups. I registered and after 15 min of clicking on Skip and other popups I gave up finding any coupons!!!!!!!!!!!

Posted 10:36 AM EST September 16, 2008Posted by: kmchamplin
I happen to favor AFullCup.com for all the UP TO DATE deals and coupon match-ups to the store sales. I have talked to many people who use to pay for the Grocerygame and then found Afullcup.com. They quit their membership since it is on Afullcup.com for free. Plus there are many times that a deal comes out later in the week and the GG site won't have it. AFC also has a place to print your own manufactuer coupons. The site is friendly and up to date. Check it out!

Posted 7:51 AM EST August 18, 2008Posted by: frugalshopper
I have most of these sites bookmarked and I agree they are very good. Another site I like which has a forum for coupon clippers and they are very helpful is fishingfordeals.com - Their members are very friendly and offer a lot of good advice about coupon clipping, how to make the most out of CVS Extra Care Bucks, etc...

Posted 11:02 AM EST August 13, 2008Posted by: couponer
Nice sites. Another good site is www.shoppinggenius.org. It is relatively new but I have honestly saved alot of money this month.

Posted 3:38 PM EST August 11, 2008Posted by: edgemyster
Great suggestions. I would also strongly recommend using Savings.com for online coupons because they allow their visitors to rate the coupons, thereby sending the best deals to the top, front and center.

WSJ - Ratings Lowered on 11 banks

BUSINESS DECEMBER 20, 2008
S&P Lowers Ratings of 11 Banks

Citigroup, Goldman Among Banks Affected; Agency Gives HSBC Negative Outlook

By LIZ RAPPAPORT
Credit-quality watchman Standard & Poor's slashed the credit ratings of 11 global banks Friday, but the moves were largely ignored by the bond market, which has begun to look positively on the governments' efforts to save these institutions.
The agency reduced the debt ratings on Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, Wells Fargo & Co., J.P. Morgan Chase & Co., and on European banks Barclays PLC, UBS AG, Credit Suisse Group, Royal Bank of Scotland Group PLC and Deutsche Bank AG.

RBS was among 11 global banks whose credit ratings were cut Friday by S&P.
S&P left HSBC Holdings PLC's rating pat, but gave the bank a negative outlook. The agency also warned that investors in the hybrid debt offerings sold by several banks may find their payouts cut if the economy and the financial markets remain tumultuous.
The actions "reflect our view of the significant pressure on large complex financial institutions' future performance due to increasing bank industry risk and the deepening global economic slowdown," says S&P in its report. The ratings agency now offers its analysis on the banks with and without the filter of current and expected government support, which it notes will eventually disappear.
Banks continue to feel the pinch from high levels of illiquid and hard-to-value assets stuck on their balance sheets, big appetites for risk, relatively weaker risk-management practices and pressure from regulatory bodies to deleverage, says the agency.
"The market has been viewing the ratings as too high and the ratings agencies wanted to bring them in line with that reality," said David Havens, a credit desk analyst at UBS Securities. "No one is surprised by this."
So some of the corporate bonds of the downgraded banks, including J.P. Morgan and Goldman Sachs, even rallied modestly Friday as investors continue to dip back into this market seeking some safe -- and higher yielding -- investments than U.S. Treasury bonds, whose yields have hit record lows.
The stock market was less positive, as shares of Citigroup fell 5.5% and Bank of America fell 1.2% Friday.
In more normal times, the lower credit ratings would mean that these institutions would pay higher rates to borrow money in the debt markets. But this negative is overshadowed by the government's many programs to give banks access to liquidity and to cheap funding. This means banks are able to issue debt at exceptionally low rates despite their deteriorating credit quality.
That won't last forever, and certainly lower credit ratings are damaging for a bank when dealing with counterparties in contracts and for funding in short- and long-term debt markets once the government programs go away.

For now, several firms, including Citigroup, J.P. Morgan, Morgan Stanley, Bank of America and others have issued tens of billions of debt backed with the "full faith and credit" of the U.S. Treasury through the Federal Deposit Insurance Corp.'s temporary program, which expires in spring 2009.
The FDIC's effort, combined with Federal Reserve liquidity programs and capital injections from the Treasury, is intended to help banks restore their balance sheets to health by stimulating their fundamental business model of borrowing at low rates and lending at higher rates. The market expects eligible issuers to borrow more than $400 billion of these bonds -- money they are required to use to lend to borrowers throughout the economy.
The S&P cuts also come a day after Moody's Investors Service slashed Citigroup's rating two notches Thursday night to A2, from Aa3.

Write to Liz Rappaport at liz.rappaport@wsj.com

FDIC info on the new higher deposit insurance coverage

Multiple Certificates of Deposit (CDs), each with a different bank, can be held within your brokerage account. Each CD is covered by its own separate FDIC guarantee ($250,000 for each).

Rating the Credit Unions - from South Florida Business Journal

Thursday, December 18, 2008, 11:45am EST
Bauer Financial ranks credit unions

South Florida Business Journal - by Brian Bandell

After evaluating third quarter financial reports, Coral Gables-based Bauer Financial gave strong ratings to nine of the 10 largest credit unions in South Florida.

The company uses federal regulatory data to rate credit unions based on capital ratio, profit/loss trend, delinquent loans and other factors.

All of the top 10 local credit unions, based on assets, maintained the same star ratings from the second to the third quarter.

The large credit unions Bauer rated five stars (superior) were:


IBM Southeast Employees Credit Union
South Florida Educational Federal Credit Union
Power Financial Credit Union
Dade County Federal Credit Union
Brightstar Credit Union
City County Credit Union of Fort Lauderdale
Velocity Community Credit Union
University Credit Union

The most profitable local credit union in the third quarter was South Florida Educational, with $961,000 in income.

South Florida’s second-largest credit union, Tropical Financial Credit Union, maintained its four-star (excellent) rating. However, Eastern Financial Florida Credit Union, the largest credit union in South Florida with assets of $1.8 billion, received no stars. No other credit union in Florida ranked that low.

Eastern Financial had the lowest capital ratio in the state, and its $18.2 million third quarter loss was the second largest in the state.

Florida’s largest credit union with $6 billion in assets, Suncoast Schools Federal Credit Union in Tampa, received a two-star (problematic) rating. Its $25.7 million third quarter loss was the largest among Florida credit unions.





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