Fixed Annuities
Fixed annuities offer predictable, guaranteed interest growth with principal protection. These are popular with retirees seeking safe accumulation of savings without market risk. Ideal for conservative investors looking for fixed returns during the accumulation or retirement phase.
They work well when interest rates are relatively stable and can be laddered over time to balance return and liquidity. Funds placed in a fixed annuity grow tax-deferred and can later be converted into a predictable income stream. Many use them as a bond alternative in retirement income strategies.
Fixed annuities are contractually backed by insurance companies and regulated at the state level. They often come with multi-year guarantees and optional withdrawal features, ensuring flexibility in access to funds for health emergencies or unforeseen expenses.
Indexed Annuities
Indexed annuities provide the potential for growth linked to a market index (like the S&P 500) without the risk of directly investing in the market. They're ideal for clients seeking upside participation with downside protection.
They are often used in scenarios where a retiree wants growth potential without the volatility of equities. Though they usually have caps or spreads on gains, they guarantee no loss of principal from market performance.
Indexed annuities often come with income riders that ensure a guaranteed withdrawal benefit for life. This makes them a flexible choice for clients concerned about outliving their retirement income. Always ensure proper understanding of contract features and costs.
Immediate Annuities
Designed for retirees ready to begin receiving payments right away, immediate annuities convert a lump sum into an income stream that starts typically within a year. They’re used to create pension-like income.
This product is ideal for those who are already retired and want to ensure steady income that covers basic expenses. Immediate annuities are often used in flooring strategies where essential expenses are covered with guaranteed sources.
With payout options including single or joint life, period certain, or refund options, they can be tailored for income duration and beneficiary protection. Be sure to evaluate payout rates and insurer ratings.
Annuities and Estate Planning
Annuities can serve as a useful estate planning tool by providing tax-deferred growth and structured wealth transfer. Beneficiaries often bypass probate when annuity contracts include direct designations.
Products with enhanced death benefits allow wealth to be preserved and passed efficiently, particularly for clients aiming to leave a structured legacy. Joint annuity options ensure continued income for a spouse or designated heir.
In scenarios involving special needs or vulnerable heirs, structured settlement options from annuities can create stable financial support. Consult with a professional to align annuity planning with estate and tax strategies.
Let’s Talk About Your Retirement Goals
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