Annuities.  There are many different kinds of annuities and there are many different reasons to look at one to cover your needs later in life.  That said, we tend to focus on fixed index annuities (FIA) and ask the questions that help us understand if they are the right fit for you and your needs.

​

As you consider your retirement plans, there are many concerns that can come up, from outliving your money, to how inflation or pandemic events might effect your planning.  Maybe you are concerned about leaving a legacy?  Others are looking to protect their assets and avoid market downturns while still achieving investment returns.  Others might want to help avoid probate issues at the end of their lives and yet others may be looking to help a charity in lieu of or in addition to leaving money to family.  If you’re like most people, there is some combination of these elements to an effective plan at play for your golden years.

These challenges can be daunting and making the right financial moves can make all the difference.

Here’s 7 reasons a Fixed Index Annuity works for many and might be right for your retirement:
 

1. We begin with the Power of Indexing – essentially this means you participate in upside gains and lock those in – without the risk of having downside market loses.So, you never lose and you gain, although not as much as the market.Your retirement is always safe, and your principle will gain and never be effected by market downturns.This makes an annuity a great secondary vehicle if you are of high risk tolerance…and an excellent primary structure for some who is mid-low risk in strategy.
    

2. Security and Guarantees ; the policy you have is only as good as the company backing it.We work with companies with an A or higher grade on Moody’s, AM Best, Fitch and the S&P.These are all registered as Legal Reserve entities in your state, which means they have to prove each year they have at least 1 dollar of liquidity for every dollar of debt. Also, each state holds a fund these companies pay into to help further insure your investment.
    

3. Tax Deferral:FIA’s allow your funds to grow tax deferred.This results in triple compounding interest.You earn basic interest.You earn interest on your interest.AND you earn interest on the money you would normally have paid taxes on.This can make a substantial difference over even 10 years.
    

4. Eliminate Fees – There are no load fees, no expense or 12b-1 fees with a FIA.And while we can’t control the market, we can help eliminate the fees that eat away at our nest-egg.This can save you as much as the triple compounding interest gains you – for a very nice doubling up.
    

5. Eliminate Risk – A very real and dangerous risk in retirement comes from what is called Sequence of Returns Risk.It is pretty much what it sounds like – and is based on the order in which your investment returns occur.If you happen to experience too many negative returns in a short period of time, while withdrawing the funds you planned to live off of, you could run out of money in retirement.An FIA helps guard against that.Which brings us to:
    

6. Guaranteed Lifetime Income:That sure sounds wonderful, doesn’t it?And Only annuities can provide lifetime guaranteed income.While traditional investments can pay both principle and interest returns, annuities offer a 3rd dimension called mortality credits which are unique.The provide higher withdrawal rates in retirement and can provide a paycheck for life, even if your money has been depleted.
    

7. This brings us to the final point – Probate. Probate is both expensive and time consuming.Annuities – just like life insurance – pass directly to the beneficiaries without going thru probate.On a 300,000 annuity, that could mean saving as much as $21,000.
    

Obviously all we could cover here today is the basic information on annuities. We’d love to have a discussion with you to find out how an annuity might work for you – or if it isn’t the right solution.  They aren’t for everyone – and that’s ok.  We have learned that these are a great fit for many, a good fit for some and not right for others. 

 

The only way to know, is to have a talk today.  Call us or email us and let’s talk about what your goals, wants, needs and desires are…and then see if this is the right fit?