Annuities

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Annuities can provide tax-advantaged saving and lifelong income.

Retirement and Annuities

In our parents’ era, retiring comfortably at age 65 was fairly straight forward—they relied on a pension to provide one-third of their retirement income, Social Security for another third, and their own savings for the final third. Today, the retirement equation is a whole lot more complicated.

The Ideal Retirement

For many Americans, the ideal retirement includes these four main characteristics:

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Safety

They don’t want to lose their hard-earned money, especially knowing they can’t re-earn it.

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Growth

Eighty percent of those surveyed said they prefer moderate growth with safety instead of higher potential with risk and volatility.1

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Tax Management

Most people believe taxes will go up in the future, so their ideal retirement strategy offers a way to control or limit taxes.

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Liquidity

Those nearing retirement want a strategy that enables them to live comfortably throughout retirement, taking income as necessary.


Types of Annuities

There are TWO main types of annuities

Fixed Annuities

A fixed annuity pays a guaranteed minimum rate of return.

Fixed Annuities Can Be Used For:

  • Wealth preservation/transfer
  • CD alternative
  • Those with a conservative risk tolerance

A Fixed Index Annuity has a minimum guaranteed rate of return with total returns based on an underlying index, like the S&P 500.

Fixed Index Annuities Can Be Used For:

  • Investors fleeing the market
  • CD alternative
  • Wealth preservation/transfer
  • Pension alternative
  • 401(k) rollovers

Variable Annuities

A variable annuity’s performance and eventual return is based on underlying investments in mutual funds and sub-accounts. These tools are considered securities and are only available through securities licensed professionals.

Variable Annuities Can Be Used For:

  • Investors that want to continue to invest in the market, regardless of risk
  • People that have maxed out alternative tax-deferred opportunities
  • Those who are interested in passing on elevated death benefits to beneficiaries (depending on riders selected)
  • Those who are looking for diversification from owning just pure equities

Stop Worrying and Take Control

How would you feel if you knew that your money would never again take a plunge because of market swings? If you are tired of the market’s roller coaster ride, but want growth potential, then annuities may be a good fit for you. Take control over your retirement AND STRESS LESS without having to spend your time studying the market and guessing its next move.

What Is An Annuity?

An annuity is an insurance contract between you and an insurance company to cover specific goals, such as principal protection, lifetime income, legacy planning or long-term care costs.

In return, the insurance company agrees to pay you a specific amount of income per month, quarter, or year. This income can start immediately or at some future date, depending on the type of annuity you purchase and the options available within that annuity. Income is paid for either a chosen period of time or even for the remainder of your life. An annuity is an insurance product and is sold by licensed insurance producers.

Annuity Basics

The purchase of an annuity, insurance product is one of the fastest-growing retirement strategies in the U.S. In 2019, consumers put more than $241 billion dollars in annuities to reduce or eliminate risk and to get their savings growing again.1 A recent Gallup poll of over one thousand annuity owners reveals a striking contrast between the American population at large and those who purchase an annuity. While most national polls show a decline in consumer confidence in retirement, more than half of annuity owners believe that they have enough or more than enough money to cover their financial needs in retirement. Ninety-three percent are happy with their annuity purchases and still own their first.1

What You Should Know About Today’s Annuities

Fixed index annuities are on the forefront of retirement strategies.

People have always known that a standard fixed annuity can provide them safety and tax-deferment, but today’s fixed index annuity, insurance products allow for growth potential and have even better options for liquidity. If you’ve ruled out fixed annuities for your situation, I’d strongly advise you to continue to learn more and meet with me for more personalized details and a suitability assessment.

How Can I Get More Details On Specific Annuities?

At this point, the process for getting more details on annuities consists of you and I meeting for an initial discussion. This is not a sales meeting, but rather a time for you to talk about your current situation and future goals, as well as ask questions you may have from this course.

If your questions are answered to your satisfaction and we both agree that moving forward with another meeting would make sense, then we will schedule that at the end of our first meeting. There is no obligation in this first meeting. The goal is for you to explore your options and decide how you would like to proceed.

Who Should Be Looking Into Annuities?

Retirees, pre-retirees, and even people still accumulating for a far-off retirement have decided that an annuity is suited for their situation. The most important step is to confirm that an annuity, insurance product, or any other financial product considered, is in alignment with your goals and is suitable for your unique situation.

If your goals align with the ideas of keeping the money you have, growth potential without the risk of market volatility, controlling or limiting taxes, and keeping access to a portion of your money, than an annuity, insurance product may be the right fit for you.

Of course, not everyone in every situation will be best served by purchasing a fixed index annuity, insurance product. That is why discussing your unique situation with us in a one-on-one scheduled appointment is crucial after learning about annuities.

What Can An Annuity Do For Me?

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The Quick Benefits

Fixed index annuities cannot lose money through market volatility because they are an insurance product and not an investment. Annuities grow tax-deferred, which means you don’t pay taxes until you access your money in the future. Many annuities provide you with the contractual option to withdraw up to 10% of your account each year without penalty, as long as contract terms are adhered to. Fixed index annuities and optional riders can be structured to provide a contractually guaranteed stream of income for life.

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Innovation

For nearly one hundred years, fixed annuities have provided yields averaging between two and five percent under the terms of the fixed annuity contract.1

Introduced in 1995, the fixed index annuity contract provides greater flexibility and options for purchasers beyond that of the traditional fixed annuity contract. A fixed index annuity gives you the option of linking to a portion of the return, paid to you under the terms of the fixed index annuity insurance product, to an index like the S&P 500. This innovation provides the qualified purchaser with an array of contractual options that simply didn’t exist before the introduction of the fixed index annuity.

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Achieve Your Goals

Everyone’s retirement situation is different and as with any financial product, including an insurance annuity product, it’s important to determine your suitability for the product given your unique circumstances and your retirement goals.

1. Laurence Kotlikoff. “Home.” Laurence Kotlikoff, 14 June 2021, kotlikoff.net/.


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