Annuities in particular fixed rate and fixed indexed Annuities, are considered to be one of the safer forms of long term or retirement savings options. Many people are concerned about outliving their savings. An Annuity can provide the potential for Guaranteed Income for Life! In this economy, Annuities may offer a better rate of return that many standard options. There are many Annuity options out there and different people may benefit from different options. Depending on your long term or retirement goals, Annuities can play an important part in your overall savings.
Since 2008, 406 banks have failed1. Only 29 Life and Annuity Insurers have failed in that same amount of time2.
There are various payout options to choose from, including those that may leave or continue payments to a beneficiary. With properly designated beneficiaries, families may also avoid Probate.
The recognition of taxable income is delayed, that is deferred, until income payments begin from the annuity.
Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Guarantees are backed by the claims-paying abiility and financial strength of the issuing insurance company. Before purchasing an annuity please seek tax and legal advice from qualified professionals.
Withdrawals will reduce the contract value and the value of any protection benefits. Additional withdrawals taken within the contract withdrawal charge schedule will be subject to a withdrawal charge. All withdrawals are subject to ordinary income tax and, if taken prior to age 591/2, may be subject to a 10% federal additional tax.
Some fixed index annuities offer Lifetime Income Riders.*- Recent statistics show that 53,000 Americans are aged 100+ (2,200% increase from 1950)3. Many today face the possibility of outliving their income.
Social Security provided at least half the income for 64 percent of the aged beneficiaries in 20134. This may not be enough income for some retirees.
*Annuities with Riders may have greater restrictions, holding periods, lower caps, and/or other limitations
FIA's allow for your principal and interest-credited to be locked-in when the market declines. (A fixed indexed annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index.)
When the market is low, an annuity has potential for growth or gains based upon the allocations chosen.
When compared to Savings Bonds with an average rate of .30% (EE Bonds), Bank CDs with an average rate of .28% (bankrate.com), and Savings Accounts with an average of .06% (FDIC),5 Fixed annuities change often. Call for most current rate.
Annuities are insurance contracts and are NOT FDIC insured, may lose value, and are not a deposit.
For those whose long-term objective is to build a source of guaranteed lifetime income, without the risk of loss from market declines, FIAs may be a choice for you, it's what some people are asking for in today's economy.
1 Jonathan Joseph. 406 Bank Failures Since 2008, Lessons for the Survivors. www.josephandcohen.com. October 2011.
2 Weiss Ratings. www.weissratings.com. https://weissratings.com/insurance/ failures May 2016.
3 Charles Passy. The Cost of Living Longer- Much Longer. Smart Money Magazine. February 2012. page 2.
4Fast Facts & Figures About Social Security 2015. Did You Know That...Social Security Administration www.ssa.gov. August 2015.
5Indexed annuities: Look before you leap; Fidelity Viewpoints. March 2016.