An annuity may be a valid retirement option for you. Some types of annuities may be able to provide you with a guaranteed* safe income source, with reasonable rates of return.** That is, if you know which options to pick.
What is an Annuity?
One great benefit of an annuity is: Your money will be protected, even in the event of a market drop. However, when the market is on an upward trend, you can benefit from this, as it may increase the interest rate of your annuity for a time. Some would consider this the best of both worlds.
What is an annuity? Is it right for you? We can help you answer this. We’ll take the time to educate you on your options, as we do with all clients. Do you know all the choices you need to make? Do you know what your current fees are? Are you comfortable with your current rate of return? And, are you aware of your current risks? We may be able to help you improve upon your current retirement strategy.
There are a number of myths when it comes to what an annuity is. You may hear some agents say that annuities are bad. Why is this?
Well, it’s important to note that not all annuity products are the same. There are a few different types of annuities. Some of them invest money directly into the stock market. However, others come with a guarantee* of safety. And, some types come with both this benefit and reasonable rates of return** over time. You can contact us to learn more about these types of annuities.
What is an Annuity?
Then Vs Now
In the past, options for annuities were more limited. Some of these products offered protection of your money, yet came with very low returns. Conversely, others offered better returns, but came with the risk of losing the money you put into it. Thankfully, though, the industry has changed. Safety and reasonable rates of return** are no longer “either or.” If you work with the right company, you can find an annuity that comes with both of these benefits, and others. For example, protection against inflation, tax benefits, and ways to leave a legacy. You have more options available to you now than you ever would have before. Let us show them to you. We can help explain what an annuity is and whether or not it’s a viable option for you.
Types of Annuities
There are three main types of annuities available to you: Fixed, variable, and fixed indexed.
The “plusses and minuses” that come with an annuity product vary greatly depending on which type it is.
First, there are fixed annuities. These products, by design, protect against loss. However, they offer fixed rates of return. The rates are typically based on current interest rates, and as a result, the returns may be underwhelming. While this option is safe, it may not provide you with enough income to support your retirement goals and needs.
In contrast, variable annuities are investment accounts. The money in one of these products is invested in the stock market, and the growth of the account is based on the value of the selected stocks. While it could potentially offer higher returns, a variable annuity has a major downside, in that if the stock market drops, so does the product. Can you handle this risk?
Lastly, we come to fixed indexed annuities, or FIAs. An FIA grows based on the performance of a market index, like a variable annuity. However, your principal has guaranteed* protection, as the issuing insurance company sets it aside in a reserve. An FIA is, assuming it suits you and your retirement strategy, the “best of both worlds” option.
Additionally, there are other benefits that a fixed indexed annuity could offer you. For example, tax deferral, ways to counter inflation, and a way to leave a legacy. Care to learn more? Contact us.
We have a thorough process for determining if an FIA is the right option for you. Attend one of our informational seminar events, which comes at no cost, and includes a gourmet dinner, also at no cost.
Or, meet with us one-on-one, to discuss your personal strategy and goals. Together, we’ll discuss several factors that could impact your retirement, and make recommendations based on what we think the best way of dealing with them is.