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Retirement Planning May Drive The Decision To Buy Annuities, But
Estate Planning And Inheritances Dr |
By:
Rosalia Scampoli, Miller DeMartine Group |
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FOR IMMEDIATE RELEASE
J.G. Wentworth Analysis:
Retirement Planning May Drive the Decision to Buy Annuities, But
Estate Planning and Inheritances Drive Many to Sell
The annuity's inherent illiquidity complicates financial
planning
Bryn Mawr, PA, February 21, 2006 - Estate planning and the need
to deal with inherited assets are among the top five reasons
consumers sell their annuities, according to customer data
compiled by J.G. Wentworth, a leader in the secondary
market for annuities.
"It's ironic that a tool many people use to prepare for
retirement can often complicate their estate planning and wealth
transfer needs," said Michael B. Vaughan, managing director of
the J.G. Wentworth Annuity Purchase Program™. "And once an
annuity becomes an inherited asset, it poses unique tax problems
for the beneficiary. Annuity holders are increasingly aware of
those facts, as 29% of the inquiries we received over the last
12 months came from investors in those two categories, while
actual fundings of purchased annuities in those categories rose
to 41%."
Vaughan noted that changing needs - whether personal
circumstances or financial/investment goals - account for most
of the rest, while "buyer's remorse" came to a surprisingly high
14% of inquiries and 12% of fundings.
With more than $1.6 trillion of assets backing annuities in the
U.S. alone, annuities have become a major personal finance tool
for consumers looking to lower their tax profile and plan for
retirement. Despite the enormous success and size of the annuity
market in the U.S., however, J.G. Wentworth estimates that 5-10%
of annuity holders would consider selling all or part of their
annuities under the right circumstances.
"The common denominator in every sale of an existing annuity by
its owner is a simple need for liquidity," Vaughan added.
"Unfortunately, given the way that life insurance companies
construct most annuities, liquidity is often difficult to
obtain."
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Article Source: http://www.friendsofvista.org/articles/article44300.html |
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