The Truth About Buying Annuities

Steve Weisman is Senior Lecturer at Bentley College in the department of Law, Tax, and Financial Planning. He has also taught courses on financial planning at the University of Massachusetts, Curry College, and Boston University. He is a host on the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including NYC’s legendary WABC and KRLA Los Angeles. A member of the National Association of Elder Law Attorneys, Weisman is legal editor and columnist for Talkers Magazine and writes for publications ranging from The Boston Globe to US Air. His books include Boomer or Bust and The Truth About Avoiding Scams. Weisman has earned a Certificate of Merit for legal journalism from the American Bar Association.

Introduction v

Truth 1          The history of annuities 1

Truth 2          Immediate annuities 5

Truth 3          Fixed rates 9

Truth 4          Deferred annuities 13

Truth 5          Annuity fees 17

Truth 6          Variable annuities 21

Truth 7          Variable annuity investment choices 25

Truth 8          Actively managing variable annuity sub-accounts 29

Truth 9          Indexed annuities 33

Truth 10        More about indexed annuities 37

Truth 11        Calculating index changes 41

Truth 12        Inflation protected annuities 45

Truth 13        Tax-sheltered annuities 49

Truth 14        Annuity settlement options 53

Truth 15        Tax deferral 57

Truth 16        Annuity risk 61

Truth 17        Annuity death benefits 66

Truth 18        Annuities and income taxes 69

Truth 19        Tax-free 1035 exchanges 73

Truth 20        Charitable gift annuities 77

Truth 21        Split annuities 81

Truth 22        Joint and survivor annuities 85

Truth 23        Shorter surrender annuities 89

Truth 24        Longevity insurance 93

Truth 25        Inheriting an annuity 97

Truth 26        Variable Annuities versus variable universal life insurance 101

Truth 27        Choosing between mutual funds and an annuity 105

Truth 28        Annuities and asset allocation 109

Truth 29        Asset allocation and laddering annuities 113

Truth 30        Minimum required distributions 117

Truth 31        59 ½ 121

Truth 32        Annuities in IRAs 125

Truth 33        Annuities and 401(k)s 129

Truth 34        More about annuities, IRAs, and 401(k)s 133

Truth 35        Annuities for children 137

Truth 36        Bonus credits 141

Truth 37        The Pension Protection Act, annuities, and long-term care 145

Truth 38        Annuities and Medicaid 149

Truth 39        Annuities and reverse mortgages 153

Truth 40        State Guaranty laws 157

Truth 41        Annuities and creditor protection 161

Truth 42        Getting out of an annuity 165

Truth 43        Annuity scams and senior citizens 169

Truth 44        Annuities and class actions 173

Truth 45        Prospectuses and annuities 177

Truth 46        Free looks 181

Truth 47        For whom annuities are best 185

Truth 48        Steve’s annuity rules part one 189

Truth 49        Steve’s annuity rules part two 193

Truth 50        Where to go for Information 197

About the Author 201