Annuities:
Understand the Benefits
Understanding Annuity Benefits
Using an annuity as part of your retirement strategy may allow you to receive a series of guaranteed* payments on a predetermined schedule. Your contract will provide the exact specifics; for example, whether you will receive your payments monthly, quarterly, or annually. Annuities also come in multiple types. For example, a fixed annuity comes with the benefit of safety.* It will not experience a loss should the stock market decline. However, the interest rate is fixed. A variable annuity, meanwhile, has the opportunity to yield higher returns, but comes with the risk of losing your money in the stock market. Last but not least, is a fixed indexed annuity (FIA). With an FIA, you may be able to earn indexed interest at a reasonable rate of return** when the market is up, yet suffer no losses when the market is down, as the insurance company protects your principal.*
Fixed Indexed Annuity Benefits
The biggest benefit of an FIA is that it protects your principal* even in the event of a market drop. This is due to the fact that the issuing insurance company is required to place your money in a reserve. However, the interest rate on an FIA is determined using the performance of a market index. This means that you may receive reasonable returns** when the market rises, but you won’t lose any money* when it declines. You are protected by the contract and the strength of the insurance provider. Additionally, an FIA offers certain benefits that retirement accounts may not. For example, certain tax benefits. Contact us to learn more.
Phases of an Annuity
An annuity contract consists of two primary phases: accumulation and distribution. Essentially:
- You make contributions to the annuity, and allow it to grow throughout the accumulation phase. Tax-deferred interest is calculated by tracking the performance of an index. The specifics of your contract will determine how the interest rate is determined.
- The distribution phase begins upon taking withdrawals from your annuity. The contract will also specify when you are allowed to begin collecting money. You can also specify the rate at which you would like to receive payments.
Do you want to learn more about these products?
Get in touch with us. You may want to schedule a one-on-one meeting with us. We can discuss your individual situation and aspirations. Is an FIA the right option for you? Let’s talk about it together.
Phases of an Annuity
An annuity contract consists of two primary phases: accumulation and distribution. Essentially:
- You make contributions to the annuity, and allow it to grow throughout the accumulation phase. Tax-deferred interest is calculated by tracking the performance of an index. The specifics of your contract will determine how the interest rate is determined.
- The distribution phase begins upon taking withdrawals from your annuity. The contract will also specify when you are allowed to begin collecting money. You can also specify the rate at which you would like to receive payments.
Do you want to learn more about these products?
Get in touch with us. One of the subjects covered in our educational seminar events is the use of annuities during retirement. Or, if you’d prefer to get right to the point, you may want to schedule a one-on-one meeting with us. We can discuss your individual situation and aspirations. Is an FIA the right option for you? Let’s talk about it together.