SAFE RETIREMENT PLANNING
Creating Retirement security is falling more and more on our shoulders.
- After years of Economic Uncertainty, can retirement income be made more predictable and secure?
- Retirees' Income comes mainly from SAVINGS, NOT LABOR.
- In recent years company pensions have all but disappeared in favor of risky company 401k plans.
- How many people do you know today that have a guarantee pension from their employer?
- According to a recent report by the U.S. Treasury, Social Security is heading towards a $16 Trillion dollar deficit.
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Fixed Annuities Benefits:
· Make retirement income more certain · Have built in tax advantages · Safety, yet grow over time · Designed for those seeking guaranteed retirement income. · Security · Peace of Mind |
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Basic Annuity Facts
What is an Annuity? To put it simply, an annuity is a contract between an individual (called the annuity owner) and an insurance company for a guaranteed interest-bearing policy with guaranteed annuity income options. * These income payments are made from the principal and interest accumulated within the annuity. The size of the payments depends on the size of the original premium used to purchase the annuity and the number of years the annuity is allowed to accumulate interest. Some payments begin within 12 months of purchasing the annuity while others begin after several years - depending on the type of annuity purchased. The purpose of most annuity plans is to assist an individual (called the annuitant) in planning for retirement by guaranteeing to provide an income for as long as he or she lives. However, many alternative payment options are available, and retirement planning is only one of the many reasons for purchasing an annuity. (*It should be noted that in addition to the fixed annuities described on this website there are also variable annuities. However, due to the fees and risk of principal associated with variable annuities, they are not discussed on this site.) What funds can be used to purchase an annuity? An annuity can be purchased with either qualified or non-qualified funds. Qualified funds are pre-tax dollars contributed to an IRS-approved savings plan such as an IRA, 401(k), 403(b), 457, Keogh, etc. Non-Qualifiedfunds are after-tax dollars that are simply held in a regular savings account or CD or are contributed to an after-tax savings plan like a Roth IRA. |
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Equity-indexed Annuity
An equity-indexed annuity is a fixed, tax-deferred annuity like others defined on this website. What makes this type of annuity different is how the gains are credited. Instead of crediting a company-declared interest rate of say 4, 5 or 6 percent, the gains are linked or indexed directly to the growth performance of a leading stock market index, such as the S&P 500. Like other fixed annuities, there is a 100% guarantee of principal plus minimum interest (usually around 3 percent). An individual cannot lose a penny, as long as he or she stays in the contract for the full contract term. Unlike other fixed annuities, however, the owner has the potential to make more money if the index goes up. And if the index goes down? No problem - the owner does not lose anything and is still guaranteed 100% of principal plus minimum interest. (And because there are no sales charges, management fees, expense charges or mortality costs, 100% of the premium is used to accumulate funds. Plus, equity-indexed annuities are tax deferred, so no tax is paid on the gains as long as those gains remain in the contract.) Basically, equity-indexed annuities provide an incredible opportunity to invest in the stock market with absolutely no risk! Fixed Tax-Deferred Annuity A Fixed Tax-deferred annuity, also referred to as a tax-deferred annuity, is a contract between you and an insurance company for a guaranteed interest bearing policy with guaranteed income options. The insurance company credits interest, and you don't pay taxes on the earnings until you make a withdrawal or begin receiving an annuity income. Your annuity contract earns a competitive return that is very safe. Immediate Annuity Like other annuities, an immediate annuity makes it possible for an individual to turn a lump sum of cash into a guaranteed income stream. Yet while other annuities remain untouched to accumulate funds, an immediate annuity skips the accumulation phase and begins to issue income payments soon after it is purchased - usually after 30 days. |
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