Word From The Wise Archives - Page 2 of 3 - Creative Edge

Star Trek: Next Generation was always right in my wheelhouse. I loved the optimistic and technologically advanced view of the future along with the adventure inherent in exploring the unknown. A favorite character was Data (the first to be discovered but second to be created, for aficionados): sentient android or artificially-created being through which the… Read More

As children, we’re repeatedly told that the world is our oyster, and that we can be anything we want to be if we just put our best foot forward. After all, how many of us envisioned growing up to be professional athletes, musicians or entertainers? It wasn’t that we were delusional – we just believed… Read More

There is so much heat and so little light in the debate over how to avoid the “fiscal cliff.” I recently watched a Sunday morning news show in which the anchor played footage showing Speaker Boehner saying that tax rates should not be raised, and then watched her pose the non sequitur to her panelists,… Read More

Several of the staff at Creative meet monthly with our Creative Agent Advisory Board (CAAB) to discuss our programs and services, and get feedback from these representatives of our independent agent field force. Interesting questions come from these meetings. One CAAB member, a registered securities representative, teed up this question: “If today’s extremely low interest environment causes a fixed annuity issued today to have low credited rates for its entire term, what is the effect of volatility on caps in indexed annuities, because most policies rebuy options every year and re-declare caps?” I thought you might want to know my response.

My column in the May edition of Creative Edge identified the innovation of the annuity lifetime income rider (LIR) as the solution to chronic underannuitization in America. From scholars to today’s financial pundits, everyone has struggled with the fact that traditional lifetime annuitization (e.g., SPIAs) as the solution to the “income-you-can’t-outlive” problem is used by only a small fraction of the population despite its obvious efficiency and uniqueness. There is no other instrument that can guarantee such income to generally risk-averse seniors (proven theoretically as the maximal strategy by Yarri [1965], Davidoff [2005], and others). Annuities are optimal, because retirees get anywhere from small to huge mortality premiums in their payouts relative to alternative asset returns, depending on age, due to the early deaths of the pool of lives. Yet, this “annuity puzzle” remains.  

Times are changing, and so is our business. The huge wave of baby boomer retirees has captured our industry’s attention – and rightfully so. Yet, many insurance agents and financial advisors can’t quite seem to put their finger on how to target one particular group of this critical segment: women. According to TD Ameritrade Institutional, a division of TD Ameritrade Inc., women control $8 trillion in assets in the U.S. and are expected to control $22 trillion by 2020. These women want and need your services, possibly more than any other market, so what are you doing to meet their goals and let them grow your business?

The need for financial and retirement planning in this country has never been greater. The recent recession has decreased the value of Americans’ nest eggs and simultaneously shrunk confidence in the ability to retire comfortably. Individuals and families are struggling to make ends meet, and they’re fearful of what the future holds. As an agent or advisor, you’re in a position to understand the challenges of today’s consumer better than anyone — and in an equally important position to help improve the financial outlook for those you serve.

An old adage says, “Fool me once, shame on you; fool me twice, shame on me.” Learning quickly from your experience presumably leads to wisdom, good decisions and a life well lived.

We all await a momentous Supreme Court decision on the future of health insurance coverage in the U.S. Countless words have been spoken and put to print, but here’s something you may not have heard.