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War On Wealth Series – Asset Growth

 

Even though an is sold like securities by companies, they are much different from policies. The best way to explain is to imagine a hybrid product that combines the advantages of long-term investments with the advantages of life . With an policy you typically pay monthly premiums, whereas an annuity generally has you making a lump sum payment upfront to guarantee a periodic payout immediately or starting at some future date that you choose.The exciting part is these payments continue as long as you live.

In case you are thinking you do not have a large lump sum there are some annuities that will allow you to deposit a modest upfront say $500 to $2500 and allow you to pay into it like you would your 401k or IRA.

The length of time people are living is getting longer and longer and this is creating financial planning nightmares for financial planners and their clients. Outliving savings has become a major source of distraction around the typical financial planning model. Investing in an annuity will allow you to save for retirement and ensure that your money lasts as long as you do.

Annuities generally fall into two categories, deferred and immediate-income.

 

Deferred Annuities

A allows you to save money for retirement on a basis until you start withdrawing money from the account. A comes in 3 flavors; fixed,variable tax-deferred or equity-indexed. We will call these flavors, “strategies”. Even though the variable annuity allows you the option of withdrawing money from your annuity at whatever amount fits your needs, it is not for the faint of heart. With a variable annuity your money is actually in the stock market and will go up or down in value accordingly. A will guarantee you usually a much lower interest rate and allows you to convert your annuity into a “fixed” monthly source of income over your lifetime. Your age at conversion determines the monthly amount of the payments to you.

A better flavor other than variable or fixed, in my opinion, for most people is an equity-indexed annuity. This type of annuity gives you the best of both worlds. It allows you to ride the gains of the stock market without participating in the losses. With an equity-indexed strategy your money is not actually in the stock market so it is not subject to the tumultuous whims of our financial markets. With the equity-indexed strategy you are guaranteed a nominal floor but are capped on the highs.

Immediate Annuities

An immediate income is essentially a contract issued to you by an insurance company that turns a single lump-sum payment into consistent payments (i.e., monthly) over your lifetime. You can even have these payments made over a specific number of years.

Not only do most annuities offer payment features that cover your spouse after you die, but depending on your situation you can opt to receive full or reduced joint income.

Annuities are sold by most life insurance companies but be selective when choosing a professional to help you determine which annuity is right for you. My advice is to look for a professional who takes a “” approach in considering which product is right for you. Unless you look at “” you are possibly putting a bandaid on your finances instead of coming up with the diagnosis and solution.

Be sure to register at our blog http://leonsblog.leonwilliams.me so you do not miss any of our postings. Below is a list of posting so far in this “War On Wealth” Series. Buckle up your seat belt and hold on s you are going to get the education of your life.


Other Posts In This Series are:

 

Leon C. Williams
Financial Strategist
LUCA Financial Services
leon@lucafinancial.com
blog: http://leonsblog.leonwilliams.me
Online Business Card: http://bizcard.leonwilliams.me

Other Articles and Blogs To Read Are:

http://money.cnn.com/retirement/guide/annuities_basics.moneymag/index3.htm
http://www.smartmoney.com/personal-finance/retirement/your-other-tax-advantaged-options-7938/
http://insurance.freeadvice.com/insurance_help.php/106_106_341.htm
http://www.immediateannuities.com/library_articles/taxation_of_nonqual_annuities.htm
http://ezinearticles.com/?Tax-Benefits-of-Annuities&id=1882533
http://www.symetra.com/client/individualsandfamilies/ourproducts/annuities/taxbenefits.asp

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Filed under: estate planning • Financial Services • Insurance • War On Wealth • WOW Asset Growth • WOW Asset Protection • WOW Debt • WOW Empowered Wealth • WOW Taxes • WOW Wealth Preservation

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