Guaranteed Income with Annuities
Do you have enough money for retirement? If you don't know, you probably need to consider other options to provide money for your living expenses after you stop working. We recommend immediate annuities, deferred annuities, and other similar options that provide you with ongoing income.
Stream of Income
Annuities have guarantees and with the "right" annuity you can have a stream of income payments made monthly directly to your checking or savings account for the rest of your life. Most people do not become familiar with annuities until they have a life change. For instance, when a person leaves a job where they had a 401(k), generally that 401(k) suddenly will no longer be treated the same as it had been during employment, and it becomes advisable to move the 401(k) into a financial program that is more suitable.
What we offer are considered to be among the fixed annuity variety, which includes all types except variable annuities. Fixed annuities combine the advantage of attractive tax-deferred compounding interest capabilities without the risk of loss . Below are descriptions of the basic concept of Annuity and the most common types of annuities.
Annuity: An annuity is an insurance plan which like Life Insurance is tied to an individual's life. It is typically used to save money and accumulate earnings or "wealth" over time. They offer tax-deferred growth, and upon the annuitant's death (if they were not annuitized), annuities pass immediately to beneficiaries without having to wait for probate. Annuities are also well suited to be IRAs. IRA or not, annuity earnings rates are nearly always higher than traditional bank savings accounts. Annuities are guaranteed by the insurance company and not the FDIC, and will have predefined penalties for early withdrawal with few exceptions. All annuities can be annuitized which means converted into a guaranteed fixed stream of income for a fixed multi-year period or for an individual's full remaining life depending on the particular plan. And like their payouts, annuities can be funded in regular periodic deposits or a lump sum.
Immediate Annuity: This is an annuity that must begin making payments generally within 30 days of its creation as opposed to the money being held for growth over time. The premium for this type of annuity is generally a lump sum deposit such as 401k or IRA rollover, inheritance, gift, lottery winnings, bonus, etc. Immediate annuities through the maximizing associated and complicated tax law combined with the compounding of interest, generally deliver an attractive value in payouts and the periodic payments are committed to you in writing and guaranteed upon opening the annuity. Included in immediate annuities are life annuities, which pay out in periodic payments over one's remaining life years; and period certain annuities, which pay out for a fixed period, where if the annuitant passes say in the 15th year of a 20-year period certain, a named beneficiary such as a child or spouse would receive the payments for the last 5 years.
Deferred Annuity: This is an annuity that is held over time to achieve growth as opposed to being used for immediate distribution. Deferred annuities are often ideal for retirement planning.
Equity Index Annuity: An annuity whose interest earnings are linked to the performance of a securities Index like the S&P 500 or the Dow Jones Industrial Average. If the Index does well your annuity will be rewarded with a higher rate of earnings. If the Index drops, unlike those owning securities tied to that index...you will not lose a penny, and depending on your particular annuity, you may even see its value go up. But unless you spend it your annuity value will never drop.
Fixed Index Annuity: A Fixed Index Annuity will not exceed or fall below the specified return levels even if the underlying stock indices fluctuate outside of those set parameters. In simplest terms, it captures the growth of an index but is not subject to loss that can be caused by market fluctuation. You cannot lose any of your principal with a fixed index annuity.
Joint-and-Survivor Annuity: An annuity that when annuitized is payable during the longer lifetime of two persons. The amount payable may decrease at the death of one or the other.
Variable Annuity (not sold here): The value of this type of annuity will vary in response to the market performance of an underlying investment portfolio. Variable annuities can diminish in value over time possibly to the point of total loss.