A look at structured settlement and pension income streams as a possible investment

In this video from 2013, two of LBN's featured commentators, Mark Wahlstrom and Matt Bracy look into a then recent bulletin issued by the SEC warning investors to carefully vet a new class of investment options being offered, specifically those tied to secondary purchase of structured settlement or pension cash flows. 

This new market, which as the SEC guidance points out, is thinly regulated and comes with risks for buyers who may not quite understand ownership rights, design and pricing and other elements necessary to making a decision.  However, as Matt Bracy discusses, the SEC notice and advice seems to miss much of the point on exactly what the concern is and to confuse certain elements of the transaction with other types of structured settlement options, making the advice in the bulletin read more like an anti-structured settlement discussion then a look at the decision by investors to purchase after market annuity income streams. 

This video looks at the diverse issues, reviews the SEC warning and looks ahead to what may be in store for this expanding market. You can learn more about Mark Wahlstrom by visiting his web page at Wahlstrom & Associates.

Executive Life of New York structured settlement beneficiaries are in for a rough ride

In a video commentary and interview on Speaking of Settlements, Mark Wahlstrom, President of Wahlstrom & Associates discusses the looming problem for those who are still receiving structured settlement payments from Executive Life of NY. (ELNY) as well as what the structured settlement profession has learned as a result of this liquidation which left structured settlement beneficiaries in some cases being paid less than originally promised.

The problem that annuity beneficiaries and owners of Executive Life of NY contracts face now is pretty simple in concept and stunning in scope. The assets that were being managed by the State of New York Liquidation Department for the last 20+ years are now going to be totally inadequate to make all of the remaining payments in full as has been assumed for years now. The politics, inflated investment assumptions, failure to communicate the potential of a future shortfall and a lack of will by those in charge to honestly address the problem, have created a perfect storm where some estimates indicate there could be a 25% to 45% reduction in future payments given the actuarial reality of this situation.  The result is that the State of New York may no longer have the option of keeping the rehabilitation and payment plan in place as is, but may be forced to commence a liquidation, with all of the negative elements that implies yet to be determined.

This will be the first of many on going video updates and interviews on Speaking of Settlements to provide context, resources and information to those impacted by the potential shortfall of Executive Life of New York.

Are annuities being overhyped?

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This question was asked in a recent Wall Street Journal article authored by writers Anne Turgesen and Leslie Scism, with the theme being that the recent news of promotion of annuities by the Obama administration is turning into marketing bonanza for life insurance agents  that could harm some investors.

A link to the full WSJ article is available by clicking here.

While I feel the headline was a little extreme, the premise of their story is dead on. That being that a rush to move people into fixed rate, immediate income annuities at the current historically low rates is going to hurt a lot of people long term when rates and inflation inevitably rise over the next 3 to 7 years.

In this weeks edition of Speaking of Settlements, I discuss this dilemma, which is faced by structured settlement experts such as myself on a daily basis. We all know that current interest rates are historically very low and will certainly go up over the next few years, but investors, savers or injury victims need to make decisions TODAY on whether or not immediate annuity income makes sense for them right now.

This will be part of a recurring series of conversations I will be having on the ideas and strategies for those looking to use annuities to fund or finance retirement, care plans, settlement plans and other conservative income strategies using insurance company products.