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| Annuities are
designed to be a longer term savings vehicle issued by an
insurance company; your principal earns tax-deferred
interest, which increases its compound-interest earning
power. After a certain period, you select, from a
series of choices, how you wish to receive your payments,
and for how long.
In a FIXED
ANNUITY, your money is used by the insurance company as a
part of their investment strategies, and they guarantee your
principal plus pre-set accumulated interest. See the example of a "two-bucket" Fixed Indexed Annuity by clicking here.
People
like Fixed Annuities because: |
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Unlike being directly
in the market, they guarantee your principal and interest. |
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Interest growth is
tax-deferred; you don't have to pay income taxes on that
growth each year. |
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Depending on the
choices when you 'annuitize", you can receive payments
for the rest of your life. |
| "Annuitize"
is insurance industry-speak for selecting your options once
you have stopped the accumulation phase (when you put the
money in) and moving to the distribution phase (when you
take the money out). It is popularly known as
"pulling the trigger", because it triggers your
benefits under the contract.
A similar,
and often confusing, product is the Variable
Annuity. It is different in a very important
manner. Please read that page now.
Annuities
have become an increasingly popular product, particularly
with investors over 50 years of age. If you have 20 or
30 years to recover from a down stock market, it's one
thing. It is quite another when retirement quits
becoming a possibility and starts becoming reality,
sometimes even when it wasn't intended.
We can
help sort it out, and we may be able to show you some
strategies for growth, even in this economy. Call or
email us. We can help. |
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