Annuities
Retirement is a big, blank canvas
Will you finally travel the world? Or will you stay local to watch your grandkids grow up? Will you buy a house with a lakeside view or start that business that you’ve been talking about?
Unfortunately, many people have a gap between what their income needs will be during retirement and what they will actually receive due to their current investing strategy. Others have lost money during market downturns or have withdrawn money because they fear losing money when things go south. If you are looking for a steady and guaranteed stream of income, you may want to consider an annuity.
So, what’s an annuity?
An annuity is a customizable contract with an insurance company to receive guaranteed, regular payments.
Every annuity contains two phases: the accumulation phase and the distribution phase.
The accumulation phase is the period where you put money through premiums into the annuity. Depending on the type of annuity, this money may grow with interest and/or can be invested into a fund that fits your risk tolerance and future objectives.
Now, remember when I said that they provide guaranteed income?
In your contract, you decide when to start receiving (and the duration of) your stream of income. For example, you may be able to receive your payments immediately or when you turn 65. They may be paid for 20 years, or until you (or your spouse as well) dies. This process of receiving payments begins what is called the distribution phase. This has helped many people to cover life in retirement, senior living care, or simply ensuring that they won’t have to rely on their children to cover their future expenses.
Whatever your goals, an annuity can provide potential opportunity for your investment to grow with interest and pay you back when you need it most.
“But what if the market goes into a downward spiral? Will that lower my income?”
Fixed annuities come with a minimum rate guarantee that is offered at the beginning of your contract. This gives you the potential to take advantage of a portion of market increases while protecting your investments from market downturns.
As you near retirement, this may also give you an opportunity to transfer investments from more aggressive avenues to a safer route that accrues growth while still paying out guaranteed distributions for as long as you decide. So, the question is, will you need a stream of income for retirement that is both steady and guaranteed?
With the almost countless options available with annuities, I would love to help you design a solution that works for you and your family. I will help make sure that your income is enough to cover expenses and that your annuity contract minimizes fees while maximizing payouts. I believe that you’ve worked hard through your life and it’s worth it to finish strong and live the life you really want to live.
If you would like to see whether or not there is an annuity solution for you, let me do the investigating to make sure that you are able to paint everything that you want to on that big, blank canvas of retirement. It just might turn out better than you could have imagined!
Send me a note and we can get started planning for your future!
Annuities 101
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Annuities are designed to be long-term investments and frequently involve charges such as administrative fees, annual contract fees, mortality and risk expense charges, as well as surrender charges. Early withdrawals may impact annuity cash values and death benefits. Taxes are payable upon withdrawal of funds. An additional 10% IRS penalty may apply to withdrawals prior to age 59 1/2. Annuities are not guaranteed by FDIC or any governmental agency and are not deposits or other obligations of or guaranteed or endorsed by any bank or savings association. Guarantees are based on the claims paying ability of the issuing insurance company. Fixed Indexed Annuities are insurance products and not considered a security or investment.
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“I do know that when I am 60, I should be attempting to achieve different personal goals than those which had priority at age 20.”
-Warren Buffett