If you’ve been talking to a commission-based financial planner about your retirement, then it’s quite likely you’ve been encouraged to purchase a variable annuity. Why? Because these contracts typically generate generous commissions for those who sell them. They are, however, a far-less-than-ideal investment for most future retirees. This article explains what variable annuities are, their advantages and disadvantages, and how to use them, if at all, in your retirement planning.
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If your retirement money is invested with an FDIC-insured bank, then you know that it’s safe (at least up the FDIC limits of $100,000 or $250,000, depending on the type of account). That’s because FDIC is more than just an insurance company. It’s backed by the “full faith and credit” of the Federal government, meaning that in a worst-case scenario, Uncle Sam will step in. And Uncle Sam has the authority to print money.

But what about money that’s invested with a broker, like Charles Schwab or Merrill Lynch? Unlike banks, brokerages are generally members not of FDIC (the Federal Deposit Insurance Corporation), but of SIPC (the Securities Investor Protection Corporation). The two sound similar and fulfill similar purposes, so they’re pretty much the same thing, right?

Wrong. While we don’t want to encourage panic or fear-mongering, we’d like to point out that SIPC is an entirely different animal than FDIC—and a less robust one, at that.
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Every week, it seems, a new story surfaces about a retiree whose golden years have been ruined by an investment scam. The stories are depressingly similar. They begin with people struggling to make ends meet. Then come telephone sales pitches, free-lunch seminars, friendly but pushy “advisors,” and promises of high returns coupled with absolute safety. The stories inevitably end with huge losses and shattered lives.

Yet you have to invest your retirement nest egg somewhere. And you want to get the best possible return on your investment, both to have enough to live on, and to ensure that it won’t be eaten up by withdrawals and inflation. How can you be sure that an investment “opportunity” isn’t really a scam? Follow these six guidelines
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Ask any financial advisor how to invest for retirement, and his or her answer will invariably include the term “asset allocation.” What, exactly, does that mean? And how can you apply it to your own situation? This article aims to answer these questions.
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Many baby boomers nearing retirement face an unpleasant dilemma: they haven’t saved enough for retirement, yet don’t have that many years left within which to do so.

If you’re in this situation and are self-employed, you may want to check out the possibility of opening a SEP-IRA, or Simplified Employee Pension Individual Retirement Account.

Unlike regular IRAs, which have relatively low contribution limits of $5,000 or $6,000 per year, SEP-IRAs enable you to sock away as much as $45,000 annually. This can be particularly helpful for baby boomers who need to accumulate a lot in a relatively short amount of time.

Check out the Small Business Boomers Blog for more on this exceptional opportunity.