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.
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Fixed Annuities Vs Bank CDs:
How Do They Compare?

Annuities and CDs (bank certificates of deposit) are similar in that they are safe, secure investments with guaranteed rate of returns based on interest rates, both issued by large financial institutions, CDs issued by banks, Annuities offered by insurance companies, but they both possess inherent differences as well.

The big differences are that while Annuities offer everything CDs offer, they carry several
advantages.

Generally Higher returns
Tax-Deferral
Liquidity

CDs do have FDIC protection to guard against Bank or banking industry failure, but Annuities also have safety measures put in place by the state to ensure Insurance companies have reserve pools in place. Insurance companies may also be vetted for financial strength by obtaining their rating from objective rating firms -- Standard & Poor's, Moody's, A.M. Best or Duff & Phelps . The more solid the rating usually equates to a more solid financial backbone of Insurance Company.

Higher Returns:
Annuities, like CDs, are hinged to interest rates. But when rates are low so are CD returns whereas annuities have a minimum guarantee in place, usually 3% or 4%. Your investment will never dip below the guaranteed minimum interest rate during times of falling or low interest rates.

Again, low interest rates mean CD returns will be low as well. To offset the problem of low or falling interest rates, insurance companies equip annuities with guaranteed minimums. This is an agreed minimum rate of interest so that your investment is assured not to fall below the minimum performance even if CD rates do.

Tax-Deferral:
You pay annual taxes on CD interest earned without being able to withdraw funds until your investment term is over. With annuities, there is also a set term, but the earnings are tax-deferred. You only pay taxes on interest earned when money is withdrawn. So with annuities the deferred tax on your interest remains in the investment earning you more and more money, instead of being paid out to state and federal tax agencies on a yearly basis.

Liquidity:

CDs do not allow you to withdraw any monies during term. Period. Annuities have provisions that allow you to withdraw money, generally 10% of your account value annually plus many contracts allow you to remove the earned interest on a monthly basis. Several other contract provisions allow you access to all of your funds such as in the event you are hospitalized, undergoing a life-threatening illness, subjected to a permanent or extended stay in a nursing home, or other major calamities that affect you economically. In addition, annuities can be structured to pay-out for the life of the owner over a fixed term such as five or ten years, thereby spreading out your tax-burden and providing enhanced income security. In short, Annuities offer enhanced flexibility.

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!

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. ASSET PROTECTION INCOME PROTECTION LEGACY PLANNING HEALTHCARE PLANNING

* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

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