How can I tell if an annuity is a good deal?

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Q.: The annuity I just bought guarantees me 5% return for the next 10 years and 5% of the accumulation at that time (I’ll be 75) for life and if I die early my wife (73) gets the 5% for as long as she lives and if we both die before I’m 95, the payments continue to my kids. I understand how expensive the fees in some annuities can be but why should I care about the fees when I am getting guarantees in return?

A.: Expensive is not always bad, just as cheaper is not always better, but fees do matter. Ideally, what you get is worth what you pay. That’s the case for any purchase. Your example is a good one to illustrate the cost of guarantees.

Your contract does NOT guarantee a 5% return. It guarantees a 5% increase to an accumulation value that can ONLY be used if converted to a lifetime payment. That 5% payment is NOT a guaranteed return either. It is merely how the lifetime payment is calculated. The payment is 5% of that accumulation value.

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To save and spend wisely, heed advice from behavioral finance experts

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In an honest moment, you’d admit that you could improve your money management skills. You just need some guidance.

So let’s pull back the curtain to examine what the experts do in the privacy of their own home to save and spend wisely.

Here’s a hint: They reject impulsivity (no rushing into time-sensitive “order now and get a free gift” offers!). They engage in open communication with family members (no hiding their extravagant purchases!). And they set sensible ground rules (no draconian spending limits!).

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Gunmen kill 6 people near protest site in central Baghdad

BAGHDAD (Reuters) – Gunmen killed at least six people near a protest site in central Baghdad on Friday, police and medics said.

More than 20 others were wounded near Tahrir Square, the main protest camp in the Iraqi capital, the sources said.

The top-performing stock of 2019

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How many of you owned stock of Arrowhead Pharmaceuticals at the beginning of this year?

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News and analysis for those planning for or living in retirement

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From MarketWatch:

This FIRE couple wants to help ‘create more black millionaires’: Julien and Kiersten Saunders are on the path to financial independence, but they — like many on this journey — started in debt.

Want to help someone retire well? Consider the gift of a ‘retirement coach’: Some people have the finances figured out for retirement, but not the future lifestyle — and there’s someone who could help them with that.

Here’s how to gauge the true cost of a bare-bones retirement: Even without plans of traveling around the world or buying the fanciest sports car, retirement will be expensive. Here’s how to estimate just how expensive.

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GE to keep its quarterly dividend at a penny a share

General Electric Co. GE, +1.99% said Friday it will pay a quarterly dividend of a penny a share, which means the industrial conglomerate will be keeping it at that lowered rate for over a year. The dividend will be payable Jan. 27 to shareholders of record on Dec. 23. GE’s stock was up 2.0% in afternoon trading. At current prices, the stock’s dividend yield is 0.36%, compared with the yield for the SPDR Industrial Select Sector ETF XLI, +1.21% of 1.94% and the implied yield for the S&P 500 SPX, +0.98% of 1.89%, according to FactSet. GE had slashed its dividend to a penny per share from 12 cents last year in an effort to preserve cash. That first 1-cent dividend was paid out on Jan. 25, 2019 to shareholders of record Dec. 20, 2018. GE’s stock has run up 55.8% over the past 12 months, while the industrial ETF has gained 16.1% and the S&P 500 has advanced 16.8%.