Our philosophy at Statewide Retirement Planning Co. is to work with our clients through education and information. We feel strongly that this approach will enable our clients to make better and more informed decisions. With this in mind, we have decided to send out a regular newsletter filled with information regarding all aspects of retirement and the retirement planning process. We hope that you enjoy reading these newsletters and are able to use the information to make your retirement years more secure and enjoyable than it otherwise might be.
Please feel free to forward copies to your family and friends.
8 Advantages of Annuities
Fixed and fixed-indexed annuities offer advantages over mutual funds and other investments in regard to safety, costs, tax-deferred savings, liquidity, taxation of social security benefits, probate avoidance, and the ability to receive a guaranteed income stream for life. Educate yourself on these advantages before you place your retirement savings at risk elsewhere.
1) Advantages Of Fixed-Indexed Annuities Over Mutual Funds
Fixed-Indexed Annuities offer advantages over mutual funds in terms of both safety and costs. Consumers need to know the truth, that fixed-indexed annuities have no loads, fees, or charges, and they keep your money safe, preventing you from experiencing losses in your retirement savings. Fixed-Indexed annuities are savings vehicles, with guarantees of principal and interest, they are not securities. Fixed-Indexed Annuities allow savers to participate in the positive movement of the S&P 500 stock market index, and lock-in annual market gains, but never market losses! Mutual funds cannot make this claim. If you are willing to accept moderation, meaning a cap on upside earnings, then such moderation comes complete with safety of principal, plus all of your annual gains are locked-in and yours to keep! Fixed-Indexed Annuities may offer the moderation you need.
2) The Advantage Of Safety With Annuities
The safety tax-deferred annuities provide consumers, is traditionally cited as the #1 reason consumers place their savings in tax-deferred annuities. Your tax-deferred annuity is safe because qualified legal reserve life insurance companies are required to meet their contractual obligations to you. Tax-deferred annuities protect your principal, your interest, and your ability to make withdrawals, when you need income.
3) Savings Advantages
Many people today are choosing tax-deferred annuities as the foundation of their overall financial plan. Why? The traditional savings dollar may be taxed every year, but tax deferred annuities offer consumers triple compounding. What is triple compounding? By postponing annual income tax with a tax-deferred annuity, your money compounds faster because you earn interest on your initial deposit, interest on your interest, and interest on dollars that would have otherwise been paid to the IRS. Similar to many CDs, annuities have a penalty for early surrender.
4) Tax Advantages
You pay NO taxes on funds in your annuity while your money is compounding. You may also pay a lower tax on random withdrawals because you control the tax year in which the withdrawals are made, and only pay taxes on the interest withdrawn. If you decide to annuitize, that is, to take a monthly income from your annuity, your taxes may be less because they will be spread out over a period of years. Tax deferral gives you potential control over an important expense - your taxes.
5) Liquidity Advantages
Annuities provide consumers with the liquidity they need in retirement. Most annuities allow funds to be withdrawn by way of a free 10% withdrawal feature annually, guaranteed lifetime income rider or via annuitization (Not generally recommended).
6) Keep More Of Your Social Security Benefit When You Utilize Annuities For Savings
Annuities can help you reduce the taxes you pay on Social Security benefits. This is made possible by the repositioning of bonds, CDs, and mutual funds, into tax-deferred annuities. Depending on your retirement income, you may be paying tax on up to 85% of your Social Security benefit.
7) Annuities Avoid Probate
If a premature death should occur, the accumulating funds within your annuity may be transferred to your named beneficiaries, avoiding the probate process. Like most assets, however, the annuity is part of your taxable estate. Your heirs can choose to receive a lump sum payment, or a guaranteed monthly income.
8) Annuities Will Help Ensure That You Will Not Outlive Your Money
Annuities will help ensure that you will not outlive your money. According to a survey conducted in 2001, the American Council of Life Insurers found that 88% of Americans agree that, for their retirement, receiving at least some of their savings as regular income payments (similar to Social Security or a pension) that they cannot outlive is important.
Call us now at (954) 781-2220 or fill out this short survey to find out more about how you might receive guaranteed* income for life and protect your principal at the same time!
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Call Statewide Retirement Planning Co. at (954) 781-2220 or Fill out the short survey HERE. That will put you in touch with a licensed advisor who specializes in retirement income planning.
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ASSET PROTECTION
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INCOME PROTECTION
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LEGACY PLANNING
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HEALTHCARE PLANNING
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* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.
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