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Kevin Wingert, CEO of American Retirement Planning in Urbandale, says annuities are good for some but not all investors.

Annuities: Predictable Income, Protection Against Inflation

Annuities can be an important piece of your retirement income strategy. But it helps to first understand them, which is no mean feat as they seem to come in as many variations as do snowflakes.

All annuities have the same aim—to take some of your money now, invest it for a while, and then guarantee they’ll pay it back, plus a return. Some pay you for life, others for a set amount of time. Some pay a fixed rate of return, others have a variable rate. Some have death benefits for survivors, others don’t. Some tie their return to stock market performance and grant you a portion of the upsidewhich may vary from annuity to annuitywhile protecting you against downturns.

So when you weigh whether to buy an annuity, get some advice. Maybe doubly so. One of those who might help is Kevin Wingert, CEO of Urbandale-based American Retirement Planning. Before forming that financial planning firm, Wingert was president of the main subsidiary of American Equity Investment Life Holding Co. That West Des Moines firm is a specialist in equity indexed annuities.

Perhaps surprisingly for someone who spent so much time in that corner of the insurance marketplace, Wingert doesn’t think everyone in the world needs an annuity. But plenty do, he said, because "when you retire you need predictable income and protection against inflation."

People are living longer, and Wingert notes that they’re bearing more responsibility for providing for retirement income (company pensions seem to be a thing of the past). So they need to do something to protect their nest egg.

Wingert isn’t much of a fan of variable annuities (some have high fees, big sales commissions and poor investment choices that guide their return). He speaks better of MYGAs—multiyear guaranteed annuities. The insurance and asset management firm Nassau Re, which works with annuities, says that in some ways a MYGA acts like a bank CD in that it guarantees an interest rate for a set period of time.

Some annuities are alternatives to bonds, Wingert says. "[At] two, three or four percent, those returns are no different than high-quality bond funds," he says, with the exception that with a properly bought annuity there is no risk to principal.

So they deserve a look. They have an advantage of being available in whatever size you want, from thousands of dollars to millons. Bear in mind that they tie up cash, so don’t go hog wild.

"You still need liquid assets for emergencies," Wingert says.
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We’re all keen in Iowa to learn who will run our government come next Tuesday. If we’re in any way tied to Iowa’s massive agribusiness sector, we’ll also be interested in whether voters in California say yea or nay on Proposition 12. That ballot measure could have far-reaching consequences for Iowa food and livestock producers.

Media in California paint this picture of Proposition 12: It will tighten state laws on cages for farm animals, requiring more space than many large farms currently provide. It will ban the sale of meat in California from calves raised for veal or breeding pigs unless the farms that raise themanywhere in the countrymeet minimum standards for pen size.

Proposition 12 also will ban the sale of eggs from hens that are kept in cages that don’t meet minimum standards. And by 2022 it will require all eggs sold in the state to come from cage-free operations. Iowa, the nation’s largest egg producer, currently accounts for 30 percent of the out-of-state eggs bought in California.

Iowa, Missouri and 11 other states are currently locked in a lawsuit against California over a cage size law it enacted in 2015. If Proposition 12 passes it seems very likely to spur further litigation.
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Some attendees invested directly in real estate. One sunk money into an amusement park (he lost big but his kid had fun, he joked).

For these and many other rich people, hedge funds, private equity and other traditional velvet-rope investments are no longer enough. They're looking to "go direct"—Wall Street-speak for putting their money straight into a business.

Direct investing is a well-worn strategy for billionaire families like the Dells and Pritzkers, who have multiplied their wealth by buying into private enterprises. But it's now trickling down to mere centimillionaires, who may lack the funding and financial know-how to build their own family offices, as public-market valuations grow ever larger.

The drive is also rooted in envy: Wealthy investors have watched people who took early stakes in successful startups such as Uber Technologies and Airbnb accumulate massive riches, at least on paper. Then there's the simple prestige of owning a piece of a company and having more power, in theory, than they would in a passive investment.   > FULL ARTICLE

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Deferred Compensation plans can be powerful yet complex financial planning tools for executives. Learn more about a few planning concepts with deferred compensation plans, as well as some common mistakes to avoid when utilizing these plans. > FULL ARTICLE

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