Annuities

There’s no question that annuities can be a powerful tool when it comes to saving for retirement. Getting monthly or yearly payments through an insurance policy to help add to Social Security and savings for your retirement income will go a long way towards helping you make sure you have the life you want during your aptly named “Golden Years.”

Annuities are so powerful because they are designed with the specific purpose of helping you reach long-term financial goals. This type of savings also tends to grow faster because no income taxes are paid on the contract until withdrawals are made. The right annuity program guarantees lifetime income, and that’s a safety not that’s hard to find in today’s world!

There are both advantages and disadvantages to an annuity plan, and each one is a little bit different so it is crucial to get a plan that best fits your specific budget, goals, and needs.

Take to one of our professionals today to talk about:

• Fixed deferred annuity plans
• Income annuity plans
• Variable annuity plans

Fixed Deferred Annuities
The fixed or deferred annuity is one of the most common and most popular plans out there. This is the more conservative style of annuity. It offers savings that are tax-deferred, meaning you pay only once payments start out, and it also comes with fixed interest rates that help protect you from the up and down volatile nature of the markets.

These are the type of annuity plans you’re looking for if you want something that is considered safe, stable, and predictable. You can then save for a long-term goal such as retirement. This will offer an additional source of income that can be combined with others to create a much better post retirement life style.

Fixed annuities are often seen as a good safe addition to any long term investment portfolio. It offers a safe steady way to grow your investment. As long as the principal isn’t withdrawn, it is protected from the ups and downs of the market.

Guarantees You Can Trust

Not only is the money in an annuity protected from loss but it will continue to grow in value over time. Add in a fixed interest rate that you can track, and you won’t be left guessing at what you’re earning. It won’t be top of the market, but that slow and steady growth is something that can be tracked over time.

Tax Benefits

One of the reasons that annuities can grow so steadily is not just the fixed rate of interest, but the earnings are tax free as long as they stay in the annuity. This allows compounding to work its magic over time since the annuity generally is never taxed until a withdrawal is made.

This means that money that would otherwise be paid in taxes stays in your account and accrues more interest for you, instead.

Flexible Income Options

A fixed annuity is consistent and easy in the way it works to increase your investment, but it also offers a degree of flexibility when it comes to the payout options. Anyone who owns a fixed annuity has the option of taking a fixed payment for a pre-set amount of time, or choose an option that gives consistent payments for life.

There are even plans that offer some balance between the two. Sit down with one of our specialists today to figure out which of these options might be best for you!

Income Annuities
Income annuities are another option for investors. This is a special type of annuity that has very limited, or even no, liquidity that still provides holders with a set guaranteed income over a period of time. This time might be set in the policy or it could be for life, depending on what policy the individual chooses.

Income from these annuities can start at a pre-determined age or date in the future, or in some cases they can even start right away.

Flexible Tax Options

When it comes to an income annuity, there are a couple different ways the taxes can play out. On one hand, if you buy a new income annuity with saved money, income that you have already paid taxes for, then part of each future annuity payment will be non-taxable because it will be counted as a return on what you paid for the annuity, but the other part of these payments will then be considered fully taxable earnings.

If the entire annuity is purchased with pre-tax money then the entire payment is considered taxable income.

Guaranteed Income Benefits

Social Security isn’t going to provide nearly enough for most people to live off of after retirement – and certainly not at the level that they want. An income annuity is a way to provide some measure of guaranteed income for a set amount of time that will supplement Social Security, a pension, or any other retirement savings you happen to have put away.

The benefits of a guaranteed supplemental income are obvious, and a major part of why these annuities are so popular.

Your Income Options

The holder of the policy (often called the contract owner) gets to decide when they receive that income, and how often payments are made. There are some limits to this based on the contract that comes with the annuity, but within that contract an individual actually has a surprising number of options when it comes to setting up payments the way they want them.

Variable Annuities

Variable annuities are a little bit different. The variable is because part of the annuity can be put into markets, giving it a much higher chance of netting major growth even while in retirement, but also putting up a portion to the up and down risks that come with the volatility in the market.

With a variable annuity you get to decide how much of the money in the annuity is invested, and then get walked through the various options for having that money professionally managed. Once you find something that meets your tolerance for risk, you’ll see what options you have for managed investment by professionals.

Variable annuities can offer a variety of other benefits that include protection of your death benefit, lifetime income payments, and even tax-deferred accumulation in some situations.

Tax Deferral Benefits

Most variable annuities are tax deferred in some way, and that can definitely work in your favor. Since the money is tax free as it accumulates, that’s more and more income that gets re-invested into your account and it earns a lot more for you over the long term. Taxes don’t kick in until you start taking payments.

Looking at Your Managed Investment Options

You won’t be stuck with picking out individual stocks and investments with a variable annuity. Each one will have a range of investment choices that are clearly explained and managed by professionals who know the ins and outs of how the investment markets work.

From these options you can choose one that fits your needs, goals, and risk tolerance the best.

Special Protections

There are certain special protections that come with many variable annuity products. These should not be overlooked when picking out the right program for you!

Just a short list of these potential protections include:

• Choice of guaranteed death benefit
• Choice of how the benefit is paid out
• Living benefits
• Guaranteed asset or income protection

Your Income Options

There are several options when it comes to how and when you want to receive your income from the mature annuity. Consistent and automatic withdrawals are a popular and convenient option, and you can set them for just a certain amount of time or for the rest of your life – there are many different options available!