FedWeek’s recent article entitled “Buying an Annuity for an Income Stream” explains that these annuities come in two varieties, immediate fixed annuities and immediate variable annuities. With an immediate fixed annuity, you receive the same amount each month, as long as the annuity lasts.
However, a fixed payout may not be attractive, because that fixed amount is likely to decrease in value over the years as prices increase.
There are, however, immediate variable annuities with payments that are indexed to inflation.
There’s are also immediate variable annuities, where you decide among investment accounts with the aim of upping your payments.
Immediate annuities can be a good strategy for people 65 and older. That’s because the older you are when you buy one, the more cash flow you’ll get and the greater the portion of each check that will be a tax-free return of capital.
When you purchase an immediate annuity, you can select some of the terms of the contract. Let’s look at some of the common choices.
A straight life annuity will pay one individual for as long as he or she lives, whether it’s a month or 50 years.
With a joint annuity, a married couple purchases an annuity that will pay as long as either spouse is alive.
Finally, there are period certain annuities. This kind of annuity can be on one person’s life, just like a straight life annuity. However, with a period-certain annuity, the insurer agrees to make payments for at least a specific number of years (a common term is 10 years). If the annuitant dies within that term, payments to a beneficiary will continue until the term is completed. You can get period-certain annuities for many different lengths of time.
Note that joint annuities and period-certain annuities have smaller payouts than a straight life annuity.
You need to consider whether protecting a spouse or another beneficiary is worth the reduced cash flow while you’re around.
Reference: FedWeek (June 18, 2020) “Buying an Annuity for an Income Stream”
Edmond de Rothschild Holding SA described Benjamin as a “visionary entrepreneur, passionate about finance, speed, sailing and automobiles.” He died recently at 57 of a heart attack, according to Wealth Advisor’s recent article entitled “Billionaire Benjamin De Rothschild, Heir To Storied Banking Fortune, Dies At 57.”
A member of one of Europe’s most famous banking families, Benjamin de Rothschild inherited a branch of the family bank that concentrated in private wealth management. The Edmond de Rothschild group, founded in 1953 by Edmon Adolphe de Rothschild, manages more than $190 billion in assets and employs 2,600 people in 32 locations around the world. Forbes estimates that Benjamin was worth about $1.4 billion at the time of his death, with his ownership of Edmond de Rothschild Holding SA accounting for most of his fortune.
Benjamin is survived by four daughters — Alice, Eve, Olivia, Naomi — and his widow, Ariane, who has run the Rothschild Group with him for several years.
Benjamin was a descendent of James de Rothschild, the founder of the French branch of the Rothschild family and one of five brothers who were sent across Europe by founding father, Mayer Amschel in the early 1800s. In 1953, Edmond Adolphe de Rothschild, the great-grandson of James de Rothschild, formed the branch of the bank is called Edmond de Rothschild. This branch of the bank is very different from the more famous Rothschild & Co that is best known for its part in drafting the rulebook for the international bond market before WWI.
Benjamin De Rothschild had been in control of the banking concern created by his father since 1997 and worked to simplify its structure after delisting.
As of the end of 2019, Edmond de Rothschild Holding SA had $194 billion in assets with activities in 15 countries.
In 2018, after battling another branch of the family over the use of the family name, the two factions announced they’d reached an agreement on the use of their respective brands, after litigation in 2015 from Benjamin concerning the Rothschild name in private banking.
Since 2015, Edmond de Rothschild has been run by Ariane, Benjamin’s wife. This was a decisive turn from the last will and testament of founder Mayer Amschel. He wrote famously in 1812 that the Rothschild business should pass between male heirs and “belong to my sons exclusively.”
The banker donated generously to Israel, including $22 million for the country’s effort to combat the coronavirus.
Reference: Wealth Advisor (Jan. 26, 2021) “Billionaire Benjamin De Rothschild, Heir To Storied Banking Fortune, Dies At 57”