| Annuities are
designed to be a longer term savings vehicle issued by an
insurance company; your principal earns tax-deferred
interest, which increases its compounding earning
power. After a certain period, you select, from a
series of choices, how you wish to receive your payments,
and for how long.
There are
two major categories of Annuity Contracts: they are
Fixed Annuities, and VARIABLE ANNUITIES. Under the
"Fixed" category, you may have either a regular
Fixed Annuity, or a Fixed Indexed Annuity (often simply
referred to as an Indexed Annuity).
VARIABLE
ANNUITIES, by their nature, are a separate category. Like any other annuity, they are a contract
with an insurance company. They differ from
"fixed" annuities because the account values are
invested in the Stock Market through Mutual Funds.
Because of
this, no guarantees can be made by the insurance company
regarding growth or retention of the account balances,
including your principal.
Even Suze
Orman, who many people consider a TV Stock Market Guru, has
publicly stated: "If you are going to retire within 10
years, reduce your exposure to the market now."
Jim Kramer of Mad Money, another popular MSNBC TV show said
on Oct. 13, 2008: "I believe the market will drop 20%
over the next 5 years."
Some
people may want to "roll" their variable annuities
into other, more "market-safe", vehicles.
Often this can be done with no tax consequences; other
times it may still be worth it. Many people have
variable annuities, for example, that have passed the
surrender period (so no penalties for withdrawing all of it
would even apply), but are unaware of that fact.
If you are
concerned about whether your variable annuity has surrender
charges, or you are unclear about the type of annuity you
own, or its provisions, we can help you find that out.
If you
want to know more, email or call us. We can help. |
