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Variable Annuity-Choosing Variable Annuities For Your Financial Future

Choosing Variable Annuities For Your Financial Future

When investing in variable annuities you have a number of choices to make. First you will need to decide between the two main types of variable annuities, then you will also make the decision of where you want the money you invest to go. The two main types of variable annuities are the same as fixed annuities, but because they are variable you have more say in where the money goes and can continue to invest over time.

Deferred Versus Immediate

The two main types of variable annuities, much like fixed annuities, are available in both deferred and immediate types. A deferred annuity is one that does not start paying out until a predetermined date in the future, usually after the term ends. An immediate annuity, on the other hand, starts paying out right away, so that you start receiving monthly checks from the start. The deferred type is generally considered to be the better choice for those who still have some time before retirement. It allows the interest earned to be reinvested and continue to earn. For those who are seeking more immediate returns or who are close to retirement, an immediate variable annuity is the better choice.

Deciding Where Your Money Goes

For many people, the big draw of a variable annuity is the opportunity to determine where your money will go. You can select to invest it in one place or separate it among bonds, stocks, and other options to diversify your investment. Making the choice of where to put your investment requires a little research and knowledge of the current market and upcoming market trends. Fortunately, you do not need to be a financial expert to make these decisions. Your insurance agent can provide you with solid advice and make certain you realize as much return as possible.

You also have the option to move that money around as you see fit in response to economic changes. This allows you to have more say in where you money goes and also works to increase your returns as much as possible.

Choosing your variable annuities is a relatively simple process, but it is more involved than a fixed annuity. Many people enjoy this process, and if this is the case for you, variable annuities are a great choice for your retirement. Your insurance agent is there to walk you through the process and make sure you get what you need from your annuities in order to prepare for your retirement.

Roth IRA-Securing Your Financial Future With A Roth IRA

Securing Your Financial Future With A Roth IRA

When you are considering your options for retirement investments, a Roth IRA is one of the more common possibilities you will encounter. This tax deferred
retirement savings account allows you to invest your money in stocks and bonds, generally through the use of mutual funds, or in other areas of investment. It provides a relatively low risk method of investing for your retirement and has tax advantages over other investment choices.

Differences From Traditional IRAs

A Roth IRA differs from traditional IRAs in a few ways, the main one being that there are generally fewer rules and restrictions applied to a Roth IRA. This is part of what makes them popular as a retirement account choice. A few of the advantages with the Roth IRA include the ability to make contributions to the Roth IRA even if you have a 401k, and a lack of requirements for withdrawals at a certain age. Roth IRAs can also be passed down to your heirs.

One of the disadvantages of a Roth IRA is that the contributions are not tax deductible, as they are with a traditional IRA. However, a Roth IRA, unlike traditional IRAs, allows for tax-free withdrawals under the appropriate circumstances. This tax difference means that although contribution limits are the same for both types, the effective contribution is higher with a Roth IRA.

Contributing To A Roth IRA

Much like traditional IRAs, a Roth IRA has a limit on contributions. Married couples can each contribute their limited amount to the Roth IRA each year. When it comes to making contributions, a Roth IRA is much the same as a traditional one, although your contributions will not be tax deductible.

Making the choice between a traditional and Roth IRA can be difficult for people new to investing; fortunately, your financial advisor can help you to make the right call. Today many insurance agents also provide financial services including Roth IRA investments, which means you can speak to the same person you already trust with your insurance needs to help you with retirement investments.

A Roth IRA can be a very useful investment tool to ensure you have the money you need for retirement and can also provide you with a legacy for your family, since they can be passed down to an heir. This makes them both an investment for you and an investment that allows you to provide money to a loved one when you are gone.

Is An Indexed Annuity Right For You

Is An Indexed Annuity Right For You?

If you are shopping for annuities to add to your retirement income plan, you have probably run into quite a few options. When it comes down to the decision between a standard annuity and an indexed annuity, it helps to understand the difference between the two and the level of risk and return for each option.

What Is The Difference?

An indexed annuity is very similar to a standard annuity; both are offered by insurance companies and provide a monthly income as a return on investment. The return on both is based on interest earned as laid out in the annuity contract. The main difference, in fact the only difference between the two, lies in how the interest rate that provides your return on investment is calculated. In a standard annuity, the interest rate is set out in the contract from the start. With an indexed annuity, however, the method of calculating the interest is a little different.

An indexed annuity is a standard annuity that is connected to a particular index, and it is from this index that the interest is derived. A formula is used to determine how much your return will be—based on how the index performs—as well as a cap that is placed on the return in the contract. This type of annuity usually also has a fee attached to the return, which lowers the return even further.

Why Choose An Indexed Annuity?

Indexed annuities are a good fit for those with a relatively low tolerance for risk but who are still planning for their upcoming retirement and willing to take on a little more risk in order to garner a larger income. Indexed annuities have a low risk because there is a minimum return that is guaranteed in the contract. Still, risk is involved, because the return on the investment can fluctuate quite a bit, whereas a standard fixed annuity is more stable.

Choosing an indexed annuity increases the potential for returns while increasing your risk very little. Many investors, especially those looking to boost their retirement income a little, are willing to take on the small risk of an indexed annuity in the hopes of seeing a good return.

Of course, the choice of annuities is a personal one and based on your financial position and your retirement needs. Your insurance agent can help you to determine if indexed annuities are right for you and show you how they can fit into your portfolio to help you reach your retirement goals.

Is An Indexed Annuity Right For You?

Is An Indexed Annuity Right For You?

If you are shopping for annuities to add to your retirement income plan, you have probably run into quite a few options. When it comes down to the decision between a standard annuity and an indexed annuity, it helps to understand the difference between the two and the level of risk and return for each option.

What Is The Difference?

An indexed annuity is very similar to a standard annuity; both are offered by insurance companies and provide a monthly income as a return on investment. The return on both is based on interest earned as laid out in the annuity contract. The main difference, in fact the only difference between the two, lies in how the interest rate that provides your return on investment is calculated. In a standard annuity, the interest rate is set out in the contract from the start. With an indexed annuity, however, the method of calculating the interest is a little different.

An indexed annuity is a standard annuity that is connected to a particular index, and it is from this index that the interest is derived. A formula is used to determine how much your return will be—based on how the index performs—as well as a cap that is placed on the return in the contract. This type of annuity usually also has a fee attached to the return, which lowers the return even further.

Why Choose An Indexed Annuity?

Indexed annuities are a good fit for those with a relatively low tolerance for risk but who are still planning for their upcoming retirement and willing to take on a little more risk in order to garner a larger income. Indexed annuities have a low risk because there is a minimum return that is guaranteed in the contract. Still, risk is involved, because the return on the investment can fluctuate quite a bit, whereas a standard fixed annuity is more stable.

Choosing an indexed annuity increases the potential for returns while increasing your risk very little. Many investors, especially those looking to boost their retirement income a little, are willing to take on the small risk of an indexed annuity in the hopes of seeing a good return.

Of course, the choice of annuities is a personal one and based on your financial position and your retirement needs. Your insurance agent can help you to determine if indexed annuities are right for you and show you how they can fit into your portfolio to help you reach your retirement goals.

Contact us for a free Annuity quote at 949-215-5911.

Life Insurance And Retirement – Re-evaluating Your Policy

If you are one of the many who will be retiring in the next few years, or if you have recently retired, you likely are thinking about changes to your finances. While retirement planning usually involves 401Ks and a reduction of your monthly expenses, changes to items such as life insurance may not be the first thing that come to mind. Retirement, however, may be the best time to re-evaluate your life insurance policy. Here are some things to consider in selecting life insurance that is retirement ready.

Final Expenses

While paying for expenses such as your children’s tuition fees or your mortgage may no longer be a concern, making sure your loved ones are not left with expenses such as covering your personal debts or funeral costs can really ease the burden after you are gone. There are a number of insurance policies specifically designed to cover these types of expenses, and in most cases the cost is very reasonable even after you have reached retirement age.

Permanent Life Insurance

Whether or not retirement is in your near future, considering the benefits of a permanent versus a term life insurance policy is important. Permanent life insurance policies give you the ability to retain some value in the principal that you can cash out later, thereby acting more as an investment than a term life insurance policy would. If you have already have a permanent life insurance policy, retirement may be the time to consider the benefits of cashing out some of its value.

Annuities

Annuities are another type of investment option that is offered by insurance companies. They act as a type of retirement protection that can give you the security of knowing you will have a guaranteed income should you live longer than expected, or should your retirement savings not be enough. There are a number of options to choose from in the annuities market, ranging from safer investments to riskier, potentially with higher yield return options.
Retirement is a major life change, and taking another look at your life insurance protection and options is an important part of preparing your finances. An insurance agent can help you find the options that are right for you.

Roth IRA Annuities

Both the Roth IRA and the annuity are popular choices as retirement income investments. A combination of the two, known as a Roth IRA annuity, is a good way to combine the advantages of both annuities.

How It Works

Simply put, the money that you invest into your Roth IRA is placed in an annuity through which it is invested in a selected fund, bond, or stock. A Roth IRA is a tax sheltered account, but contributions are not tax deductible. Annuities also have tax advantages, and some of those advantages will overlap and give you extra benefits that you wouldn’t get from either option on its own.

By investing into an annuity through your Roth IRA, you can obtain the guaranteed income that comes along with an annuity but also have the tax-free withdrawals that come with investing in a Roth IRA. You will also be bound by the contribution limits of the IRA rather than investing the amount of your choosing, as with a regular annuity.

Returns On Investment 

Investing in an annuity through your Roth IRA may or may not be a good idea. It is important to understand what your return on investment will be and have a good idea of which option will benefit you most. A financial advisor can help you determine where the best return lies and help you understand the market trends that can affect your investment.

The main difference between a Roth IRA and an annuity in terms of return is that you will get monthly payments from your annuity based on the interest it is earning. A Roth IRA does not provide monthly payments, but does offer tax-free withdrawals. Both types of investment can place your money in various funds, stocks, and bonds. The choices offered by your annuity may offer a higher return, or the return may be higher elsewhere; it is important to consider, however, that the annuity has a better guarantee of return on investment and thus somewhat less risk.

The best way to determine if a Roth IRA annuity is the right choice for you is to take the time to sit down with a financial expert and look at your choices. Your insurance agent who provides annuities can help you look over your options and make the investment choice that is best for you. Knowing your current financial state and your goals for retirement, an insurance agent and financial services expert can guide you in making the best moves for your future.

Types Of Fixed Annuity Products

If you are considering a fixed annuity as a retirement income option, you will

need to learn the different types of fixed annuities on the market today.

Each of them has something specific to offer, and there is a perfect fixed

annuity for everyone. The three main types are immediate, deferred, and

CD-type fixed annuities.

 

Immediate Fixed Annuities

An immediate fixed annuity is, as the name implies, an annuity that pays out

immediately. This is the best known type of annuity; once you make the

initial premium payment, you will see the monthly payments arrive shortly

thereafter. An immediate fixed annuity is a good choice for anyone who

wants to see a return right away and has a short-term goal in mind. They

are perfect for retirees who want to supplement their retirement income in

the immediate future. Payments will continue until both the amount of the

premium and the interest acquired run out.

 

Deferred Fixed Annuities

With a deferred fixed annuity, the interest is reinvested rather than being

paid out right away. No payments are made until a later date, usually at the

end of the term. The money is tax-deferred, allowing you to earn interest

instead on money you would have paid taxes on. A deferred fixed annuity is

a good choice for someone who is thinking ahead and foresees the need for

the income, but has not yet arrived at that point. Most deferred annuities do

allow for an early withdrawal at a certain amount without penalties, if

needed.

 

CD-Type Fixed Annuities

This third type of fixed annuities is a blend between a fixed annuity and a

CD. This gives you some of the benefits of a CD with the lower risk involved

in an annuity. Although CDs are sold by financial institutions, CD annuities

are sold by insurance companies much like any other annuity. CD-type

annuities guarantee the rate for the entire term, which differs from a

standard fixed annuity. There are also tax benefits to choosing a CD-annuity

over a classic CD. A CD-annuity is a good choice for a wide variety of

investors.

 

To choose the right fixed annuity, take the time to discuss all of your

retirement income needs with your insurance agent. When you look at the

large picture and your short- and long-term goals, the right fixed annuity

choice will quickly become clear. All of the fixed annuity choices offer you

security and a low-risk way to ensure retirement income.

What Is An Indexed Annuity

What Is An Indexed Annuity?

There are a wide variety of annuity types, and understanding the differences

among them can be complex. One of the specific classes of annuities you

will run into as you research your options is an indexed annuity. This type of

annuity is a little different and carries a different level of risk than the

average fixed annuity.

 

How An Indexed Annuity Works

Just as any other annuity, an indexed annuity provides a monthly income

based on a one-time premium deposit at an agreed upon rate. The

difference is that the interest credited on an indexed annuity is calculated

based on the index to which the annuity is linked. While a regular fixed

annuity has an interest rate set out from the beginning in the contract, the

indexed annuity has instead a formula by which the interest is calculated.

There is a minimum guaranteed return on the investment that protects you

from some of the risk involved; however, there is more risk and often a lower

return with this type of annuity due to the caps on returns and fees that are

involved. Still, an indexed annuity can provide better monthly returns than

other types of annuities since the rate fluctuates based on the performance

of the attached index.

Calculating Interest

With a regular fixed annuity, the interest is set out at an agreed upon rate

from the beginning. However, with an indexed annuity, the return can vary

based on how the index performs and on the contract, which usually

stipulates both a cap on the return amount as well as a fee. For example, if

the index returns at 10%, but you have a 2.5% fee and a cap of 9% on

returns, you would actually see a return of 6.5%. There is usually a

minimum guaranteed return of between 1-3% that ensures you will see

some income from the annuity, but the amount can potentially be quite a bit

higher. Still, the cap on returns means you have a limited potential for

returns.

Indexed annuities are a good choice for anyone who is approaching

retirement and needs a relatively low risk investment choice that still offers a

chance at a good return on the investment. They offer the opportunity to get

a somewhat better return than a regular annuity, but may also have a lower

guaranteed return, meaning they do carry a bit more risk.

Your insurance agent can discuss with you the available indexed annuities

and help you to determine whether it is a good choice for you.

The Basics Of Fixed Annuities

The Basics Of Fixed Annuities

 

An annuity is a simple and relatively safe way to create a retirement savings

fund. Annuities come in a wide variety of types, and fixed annuities are

among the most popular for their simplicity. A fixed annuity requires a onetime

premium payment, which is a large lump sum and is locked in at an

interest rate determined at the time of payment. The annuity can then

provide retirement income from the interest earned at a later date.

 

Why A Fixed Annuity?

 

Annuities are a popular choice for retirement investment because they carry

little to no risk and have a nearly guaranteed return. You will make a onetime

premium payment and have a guaranteed interest rate; nothing will

change and your return is safe. You can set up a lifetime annuity payment

that will provide you with a secure source of retirement income for as long as

you live. Because it is a fixed annuity, the amount of each payment is

predetermined and guaranteed, so you can depend on it each month.

A fixed annuity is tax-deferred and allows you to gift or bequeath money to

family and friends tax- and probate-free. You can buy as many annuities as

you would like, each one with the same single premium payment and each

with a guaranteed rate of interest growth.

 

Buying A Fixed Annuity

 

Fixed annuities are sold by your insurance agent and although they are an

investment, they are also an insurance policy. Your insurance agent can

provide you with information on the fixed annuities available to you,

including the interest rates and the types that are offered. The two main

types are immediate and deferred fixed annuities, but you can also invest in

CD style annuities, which are in fact a blend of an annuity and a CD.

Once you choose your fixed annuity, you make the premium payment and

the terms of the policy are in force. There is nothing more you need to do,

and no further investment to make. If you want to invest more money, you

can simply purchase more annuities whenever you are ready.

Fixed annuities are an easy and safe way to guarantee a specified income

amount for your retirement years. Because the interest rate is locked in, the

premium is predetermined, and the payment amount is fixed, you can rely

on this investment to remain steady and provide you with an income for a

specified term or even for life.

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