RM for individual

Question 1

3 advantages of fixed annuities

Answer 1

• known and constant income
• allow comparison among providers
• Lower fee cost

Question 2

3 advantages of variable annuity

Answer 2

• performance adjust to current market expectations
• may better adjust income for inflation over time
• possible to reclaim some assets early

Question 3

3 disadvantages of fixed annuities

Answer 3

• rate of return fixed at onset
• no early access to funds once established
• inflation erodes purchasing power of income

Question 4

3 disadvantages of variable annuities

Answer 4

• higher cost fee
• opaque pricing make comparison among providers difficult
• payout uncertain

Question 5

objectives or constraints in IPS

Answer 5

• Risk objective;
• Return objective;
• Liquidity requirement;
• Time horizon;
• Tax concern;
• Legal and regulatory factors; or
• Other unique circumstances.