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ANNUITIES |
... lock in growth year after year
... defer income tax liability on interest earned
... keep funds out of probate
... acquire long term retirement security.
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TEN GOOD REASONS |
You would give your life for your children, so why not insure it for them?
Have you ever met a widow who said, "My husband had too much life insurance?
You haven't needed it yet? Do you carry a spare tire in your car? Do you own umbrella?
The worst time for a wife to become a breadwinner is when she first becomes a widow.
If you wouldn't like to live the rest of your life on the face amount of your current insurance, how do you expect your wife to?
Income is provided for a widow or by her, isn't it?
Losing a father is bad enough, a part time mother makes it worse, doesn't it ?
You can put ME off, but you can't put off my compeditors: DEATH and DISABILITY.
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Life Insurance won't keep people |
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WHAT IS AN ANNUITY? |
HOW DOES AN
An annuity is an annual amount payable to a contracted insurance company which allows you to accumulate retirement funds on a tax-favored basis. You will not pay taxes until you begin to withdraw your money.
You can receive a guaranteed income payable for life or a period certain, e.g. 5 or 10 years. Payments are usually made monthly but often can be made quarterly, semi-annually or annually.
Unlike a 401(k), 403(k), Keogh or IRA, there are no limits on the amount you can put into an annuity. Annuities also offer a guaranteed competitive interest rate. If you don´t want to deal with the ups and downs of the stock market, you can invest your money in a fixed annuity, which would offer you a guaranteed minimum specific rate of return ("floor"), such as 2% or 3% so that even if the stock market vehicle your funds are in goes down in value, your annuity account earns that "floor" for that year. You might have a maximum earning "cap", and if the vehicle increase to at least that amount, that would be the interest rate you would have for that year.
Retirement income from employer-sponsored plans, social security, and pensions may not be enough to meet your expenses. Inflation and taxes can reduce your assets but an annuity can be protection against outliving your assets.
ANNUITY WORK?
To accumulate retirement savings, a premium is paid to an insurance company and they promise to pay you interest. As long as you keep your monies with the insurance company, you are not required to pay income tax on gains; this is known as "tax deferral."
With a single premium deferred annuity, you have chosen to wait to receive payments from the annuity, allowing savings to accumulate, tax deferred, until you choose to receive income.
With a single payment immediate annuity, you will start to receive funds either right away or annual payments that begin within a year after purchase. You pay the insurer a lump sum of money in exchange for receiving income for a set period of time or for as long as you live.
When you withdraw your funds, your gains are taxable. When you withdraw, the insurance company will give you the option to receive a guaranteed income for as long as you live. You will pay income tax on the payments as ordinary income. If the premiums you paid were not tax-deductible, a portion of each payment will be excluded from tax as a return of premium. If you take payments before age 59 1/2, you may be subject to a penalty tax from the IRS.
You may withdraw up to 10% a year without penalty, but in the first year if your withdrawal is more than the accumulated interest, a surrender charge may be applied to the excess amount.
You can designate a beneficiary to receive payments upon your death.
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WHAT DOES |
Any interest or gain in an annuity is NOT taxable until you receive the income, so the tax payable on the gain is deferred. Since you pay no taxes while your money is compounding you earn interest in three ways:
... interest on your principal
... interest on your interest
... interest on the taxes you WOULD HAVE PAID if it had not been TAX DEFERRED.
This result is more money earned in a deferred annuity than in a bank CD or other fully taxable earnings. 
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AM I REQUIRED TO |
You are NOT required to withdraw funds from a "non-qualified" annuity. You ARE required to withdraw funds from a "qualified" annuity starting at age 70 1/2.
CAN ANNUITIES
BE USED TO FUND
"QUALIFIED PLANS,"
SUCH AS IRAs & 401Ks?
Yes. You can purchase either "qualified" or "non-qualified" plans.
WHAT DOES
"NON QUALIFIED" MEAN?
A nonqualified purchase is done using after-tax dollars. Taxes have already been paid on the funds invested. You have already earned and paid income taxes on these funds. They are allowed to accumulate on a tax deferred basis.
WHY IS
GUARANTEED INCOME
FOR LIFE
AN ADVANTAGE?
Annuities are the only investment vehicle offering a guaranteed income for life. With other types of savings you can never be sure your income will continue for as long as you live. The annuity life insurance company calculates a guaranteed income payment based on your age and life expectancy and interest rates it will credit. Payment is then guaranteed for as long as you live or for a specific period. If you have a spouse, a joint annuitant, monthly income continues until the last survivor dies.
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WHY IS |
Another primary advantage of annuities is the ability to pass on the proceeds upon your death directly to a beneficiary. Probate is a judicial process to establish the validity of a will and authorize the executor to make distribution(s). The process can take from 6-12 months and can bear significant legal expenses. Proceeds from annuities and life insurance are not subject to probate and may be passed on to your beneficiary directly.
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WHAT IS THE |
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S U I T A B I L I T Y |
Your agent is committed to establishing the suitability of a policy they recommend to you, based on the following information that you will give them, and you both must acknowledge these details in writing:
... your needs at the time of purchase
... you must receive substantial benefits over the life of the policy you purchase and understand comparative benefits and restrictions of both policies
• you must NOT incur significant penalties from the request of a replacement - the replacement must offer tangible financial benefits that outweigh any losses or costs
...some companies will decline Replace-ment business submitted within one year of the original purchase
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YOUR AGENT |
... analysis of your income and expenses (including liquidity and net worth)
... understanding your short- and long-term financial goals
... assessing your risk tolerance
• understanding your tax status
• consideration of your stage in life (still working; retired; in transition with uncertainty about income and expenses changes)
• assessment of why your current plan is not meeting your financial objectives and concerns
Your agent will present to you disclosures and marketing and sales materials provided by the issuing company, and discuss the new policy with you in detail, responding to and answering your questions. You will review and sign appropriate disclosure documents at purchase to signify that you understand the policy.
You should feel free to discuss the product with a tax advisor or legal professional and to decide whether or not to include discussions with family members who may be impacted by this financial decision.
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CONTRACT VALUES |
You will receive an annual statement. If your insurance company has a website you may be able to access your account online to get the current contract value.
The trust that you feel for your agent will be well rewarded. The insurance field is highly regulated, and, of course, the ultimate choice of whether or not a policy is suitable and affordable, rests with you.
If you feel any discomfort, let your agent know as perhaps they have a solution that will be more comfortable for you and still cover your needs.
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Let's make plans today |