Secondary Market Annuities have benefitted institutional investors for years – is it time for you to employ this powerful strategy?
So, let’s dive into this: exactly what are SMAs?
The term refers to structured settlements, immediate annuities, and lottery payments, or a lump sum that are sold through specialty finance factoring companies between one private party and another, in a uniform and legislated transaction process, throughout nearly every state. Other names are ‘Factored Structured Settlement‘ or ‘Previously Owned Annuity‘ or even ‘In Force Annuity,’ but “SMA” has become the industry standard term.
The most common secondary market annuity is much like a period certain multi-year guaranteed fixed annuity. But unlike newly issued annuities with yields in the 2- 3% range, these secondary annuity market contracts come with effective rates of 5%, 6%, or even more, and come from top rated carriers like Prudential, New York Life, MetLife and others.
If you’re primary investment goals are safety, predictability, and a complete lack of volatility, learn more about the secondary market annuities risk profile, and how you can benefit from this low risk approach.
If you’re considering CDs, Bonds and Fixed Annuities as part of your investment mix, you’re a perfect candidate for an Secondary Annuities approach. Marketwatch has an interesting article on SMA yield and some of the advantages.
If you are nearing retirement, or at least old enough to be worrying about it already, the annuity market information on this page can help you build a safe and secure financial future.
Here are a few of the features and benefits of an annuity from the secondary market
Guaranteed payments from A rated carriers (e.g. an insurance company might be a “carrier”)
Predictable Annuity Outcome:
Because these are fixed term, you’ll have a known, definite yield and payments that are absolute to you or your heirs. You can plan for a future that has a predictable outcome.
Your payments accrue to the payee/buyer you specify on your purchase. That could be you, your spouse, your heirs, your Trust, or your estate, etc.
You can profit from a higher yield with your fixed income allocation compared to other options such as bonds, CDs or Fixed Annuities.
Secondary Market Annuities have virtually no volatility. They are priced based on current market discount rates. If rates fall, you may have contracts that can be sold at a profit.
- You’re a risk averse/conservative investor
- You like to think outside the box when it comes to investments
- You’re in a May-September romance and are concerned about your spouse’s future
- You’re an expat looking for income opportunities well-suited to life abroad
- You’re looking for a good way to pass monies to your heirs
For Older Adults Retirement Safety Becomes Critical
When you’re older, the safety of your assets becomes absolutely critical for your retirement. Let’s face the brutal truth: if you were to somehow lose those assets you’ve worked so hard to acquire (god forbid), it could be absolutely disastrous. Sure, when you’re younger, you might have time to replace lost savings – but as you get older, the luxury of time fades more and more with each passing day.
Yields On “Safe Money” Are Pretty Horrible
If you’ve been fortunate enough to invest in ‘safe money’ options you solve the problem of safety, but gain a vexing new problem: Treasuries and CDs have yields so low it’s literally like losing money.
You Are Exposed To Longevity Risk
More brutal truth: the longer your retirement lasts, the more likely you are to incur the risks of a shrinking income and outlive your savings. This risk class can lead not only to secondary effects such reduced care, or a return to employment, but a generally lower standard of living.
Don’t Forget Market Volatility
As we all know, when you are involved in long term investing, you’re often able to overlook some shorter term volatility in the markets because you’re playing the long game. But when you’re counting on retirement money, market volatility can play havoc with your investments. This could mean the difference between living comfortably and just scraping by.
Inflation Risk Can’t Be Ignored
We’ve been lucky in the U.S. not to have had to deal with out of control inflation (yet…), but this often-ignored fact of life should be a major concern. Even fairly low inflation rates might diminish your retirement monies, and a longer period of unexpectedly high rates in the market could be devastating.
Securing The Future of A Younger Spouse
As you age, the retirements consequences of having a younger spouse become magnified. Taking care of your spouse after you’re gone may require special tactics because of the age difference between the two of you, and Secondary Market Annuities can guarantee income to your spouse decades into the future.
Meet the folks at AnnuityStraightTalk.com, Nathaniel Pulsifer and Bryan Anderson.
Nathaniel M. Pulsifer
Nathaniel M. Pulsifer is a retirement income expert who builds plans for clients that produce financial freedom and security, and that work even when the markets tank. His clients enjoy their retirement with income annuities that offer the optimal combination of Safety, Flexibility, Profitability, and Longevity specific to their needs.
Bryan J. Anderson
Bryan Anderson is a licensed insurance producer and a career finance specialist. With Mr Pulsifer, he started Annuity Straight Talk to bring his unique views on guaranteed ‘career-end’ planning to a wide audience. He enjoys working with investors around the US from his offices in NW Montana.
Testimonials from satisfied clients
“For years I have tried to wisely invest in/for our retirement. With the disastrous state of the economy in recent years, this had become a real challenge. I sat at the computer and researched how to make an investment/income stream that would be safe, reliable and not make us a burden on our children in our older years. I came upon secondary market annuities… After much reading, not only at Annuity Straight Talk, but many other related sights, I made the call. Nathaniel was extremely helpful and accessible, with all my questions and concerns. He guided me every step of the way: all the while, I felt he had my back. I have done numerous deals with him, and have been very satisfied every time. I believe I have found the answers for a major part of my future income. Nathaniel insists on an independent, 3rd party lawyer, to review all his cases, and HE pays for it. That to me is reason enough to take all my annuity business with Annuity Straight Talk. Much Thanks and a job well done.”
“Thank for your adroit analysis of annuities. Finally, a decision making tool that is designed for those who are trying to make prudent financial decisions regarding retirement.”
Subject: The Annuity Report: …I read it in it’s (sic) entirety. It is great, I am so glad to have this report, thank you ever so much…you must read it over and over.”
Nathaniel has produced this comprehensive video on secondary annuities most frequently asked questions. The video is about 26 minutes long (we know, take a deep breath…), but you probably won’t find a more thorough and up-front discussion of this unique asset class anywhere on the internet.
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- Discover Secondary Market Annuities
- How SMAs Are Created- 5 Part Story
- Details Of Structured Settlements
- Details Of SMAs
- Types Of SMAs
- Case Studies
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Disclosure: Please keep in mind the content on this site is not financial advice, and should not be taken as such. We recommend seeking the advice of a financial adviser before making any investment. We are proud to offer affiliate links to an outstanding organization that is an industry leader in the secondary annuity market. We do receive a small commission on sales if you decide to invest with our vendor partner.