Annuities

 

What Is An Annuity?

An annuity is a form of insurance or investment between an investor and an insurance company entitling the investor to a series of annual sums.  The investor pays a premium or lump sum that will, at a predetermined future date, be paid out with the additional value of the initial investment. The growth of funds held in an annuity is tax-deferred, meaning no taxes are levied until a withdrawal is made.  All annuities have the ability to bypass probate, so long as a beneficiary is named.

There are two main types of annuities - immediate or deferred.  Deferred annuities are broken up into two categories - fixed and fixed-indexed.  Each works a bit differently and offers unique advantages.

Deferred - Fixed Annuities

With fixed annuities, the investor receives a fixed interest rate for a set amount of time, offering the plan stability and insulation from market volatility.  

 

Deferred - Fixed-Indexed Annuities

Fixed-indexed annuities are linked to a financial index, such as the Nasdaq, the S&P 500 or the Dow Jones.  With this type of annuity, your principal will follow and appreciate the gains of the chosen index, but remain protected from any market dips or losses.  Many individuals select a fixed-indexed annuity because of the potential for a greater return without the risk of true market exposure.

 

Immediate Annuities

With an immediate annuity, the investor makes a lump sum payment to the insurance company and the institution agrees to make regular payments back to the investor at a predetermined future date, usually within 30 days.  For those who would like steady income sooner rather than later, the immediate choice would be the best option.  

 

An annuity can be an invaluable asset in your retirement-planning strategy, and when implemented correctly are a great tool for setting up lifetime income.  We are committed to finding the best possible fit for our clients, and will custom-tailor their retirement plan to adhere to their unique needs.

 

*Insurance products guarantees are subject to the financial strength and claims‐paying ability of the issuing company, and may be subject to restrictions, limitations or early withdrawal fees. Annuities are not FDIC insured.

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This information is designed to provide general information on the subjects covered.  Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement.  Please note that Olympic Golden Retirements LLC and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney. Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.  Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by Olympic Golden Retirements.