Annuity - Market Protection and Earnings

Tax Savings

Annuity - Market Protection and Earnings

Annuity / Insurance Contract
CHOOSING THE RIGHT FIT AND PLANNING FOR RETIREMENT

Annuity

If you want to save for retirement with guaranteed income from annuities, along with its protection from any market losses and principal protection, it's essential to understand your wants, needs, and goals.

The different annuities we offer at Tax Savings Investor include both Fixed Annuities & Fixed Index Annuities. Our investment professionals work with more than 20 top-ranked life insurance companies that provide our clients with the most attractive index funds to generate a stream of income for their retirement accounts. We understand that buying an annuity for guaranteed income will give you future financial strength. What works for another high net-worth individual may not work for you when it comes to living in retirement. You should try learning as much as you can about Fixed Annuities and Index Annuities before deciding which underlying long-term investment will be the best fit for you.

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A Fixed Index Annuity covers the uncertainties of Retirement

No Fees Tax Deferred Growth Accumulated Interest Guaranteed Principal and Earnings Protection from downside risk in the market Annuity beach view

Retirement Planning

Fixed Annuities

Fixed Annuities offer a set, guaranteed rate of return for a pre-determined amount of time without losing value. Fixed Annuities also grow tax-deferred, meaning the taxes will only be due when funds are withdrawn.

  1. Fixed Annuities also offer a high level of protection for your financial goals.
  2. Usually, the longer the interest-rate period, the higher the interest rate.

We will be happy to assist you in understanding your financial goals and purchasing an annuity.

With this investment product/ insurance product, you're also allowed to withdraw up to 10% of the funds in the policy annually without incurring any penalties. That way, you still have access to your monies with no additional cost. The funds will, however, be subject to income tax.

Depending on the term of the annuity's contractual agreement, there could be a penalty fee for early withdrawals of more than 10%. Take this into consideration if there is any possibility you'll need to recover your principal before the contract matures and penalties are phased out.

(FIAs)

Fixed Index Annuities

Fixed Index Annuity - Grandpa with Granddaughter
Fixed Index Annuities

Fixed Index Annuities (FIAs) are essentially hybrids of other types of annuities and utilize the beneficial elements of each.

An FIA is also tied to major stock market indices, such as the S&P 500 and NASDAQ, although your money is not invested in or exposed to the stock market. When the related index performs well, so does the annuity.

When the market starts to decline, you do not have to worry about losing share value like investors in the market; with a Fixed Index Annuity, you're completely protected from market losses.

REMEMBER

  • Set aside the appropriate funds for your annuity.

Once your goals have been evaluated, and retirement income has been determined, now is the time to ensure you are reserving enough money for your annuity to support you throughout your retirement savings.

Client relationship summaries

Do not rely solely on the advice of friends for achieving annuities or investment objectives. We all have friends who've had experiences with deferred fixed or traditional IRA strategies, both good and bad. They often will try to be helpful by sharing their stories. Yet, it is best to seek a financial professional/ investment professional to address your financial goals and indexed strategies. That's why every one of our clients has a Fixed Annuity or Fixed Indexed Annuity tailored to their specific needs and goals. We at Tax Savings Investor understand everyone's circumstance is different, and we strive to make sure to cater to those investing options and differences when buying an annuity.

Never leave your employer's money on the table. Did you know you can use your 401(k) funds for an annuity? Being able to get the most out of your annuity is much easier when you're picking up all the money available to you in the first place.

When you utilize programs with an employer matching the funds, you're getting free money, money that will help you live a more financially confident retirement.

Annuity - Market Protection and Earnings

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Our Annuity - Market Protection and Earnings

Annuities are insurance products that provide a fixed income stream for a person's lifetime or a specified period of time.

An annuity can be purchased with a lump sum or a series of payments and begins paying out either almost immediately or at some point in the future. Annuities are often used as a long-term investment to save for retirement.

Annuity - Market Protection and Earnings

Retirement Planning

ANNUITY BASICS 101

What is the difference between a fixed annuity and fixed index annuity?

Fixed Annuity / Traditional Annuity

In a traditional Fixed Annuity, interest accumulates based on a fixed interest rate guaranteed for a set period of time.

Fixed Index Annuity

In a Fixed Index Annuity, interest accumulates based on the performance of an external index, such as the S&P 500 or NASDAQ. However, even if the index performs poorly due to market influences, interest can never be lost, providing guaranteed principal protection to your long-term investment.

Annuity - Market Protection and Earnings

Benefits of Annuities

Annuities are often used as a retirement planning tool. They are a safe and highly protected investment. Other key benefits of annuities include:
  • Principal and earnings are guaranteed by the issuing insurance company
  • Earnings from the annuity are tax-deferred
  • Annuities can be purchased from a personal banking account, rollover funds from a tax-qualified plan (i.e. IRA), or from a 401k or pension lump sum distribution

Tax Savings Investor is here to assist with your annuity purchase. Call us today at (619) 322-1404 for a free consultation.

Damian Gerry -

NPN: 19473448 License: 4038677

Tax Savings Investor

Introducing What is the difference between a fixed index annuity and a variable annuity?

Fixed Index Annuities are a type of Fixed Annuity that earns interest based on changes in a market index. Even if the market goes down, you lose nothing, due to principal protection.

Variable Annuities earn returns based on the performance of the investment portfolios, known as "sub-accounts", where you choose to put your money. The return earned in a variable annuity isn't guaranteed. The value of the sub-accounts you choose could go up or down due to market volatility. If the value goes up, you profit. If it goes down, you lose money.

Growth is subject to rate floors and caps, meaning it will not exceed or fall below the specified return levels even if the underlying stock indices fluctuate outside of those set parameters. In simplest terms, with this type of annuity the insurance company bears the risk of a sharp stock-market decline. You cannot lose any of your principal with a Fixed Index Annuity, and your upside potential gains are usually capped at a rate between 3% and 9%. Many Fixed Index Annuities also offer premium bonuses, but usually at the expense of lower potential gains. Those bonuses vary among insurance companies.

Reasons to Consider Annuity Products

  • Premium Bonuses
  • Annual Growth

A Fixed Index Annuity is a tax-favored accumulation financial product/ insurance product issued by life insurance companies. It shares features with fixed deferred interest rate annuities; however, the annual growth is bench-marked to a stock market index such as NASDAQ, the NYSE, and the S&P 500, rather than an interest rate.

Here are some of the guaranteed lifetime benefits:

  • Tax deferral investing options

One advantage index funds have over a mutual fund or a bank Certificate of Deposit (CD) is that earnings grow on a tax-deferred basis. This means you pay no income taxes on the growth until you withdraw money from the annuity. This is especially important when you buy your index annuity with personal savings (so-called after-tax or "non-qualified" funds). Index annuities can also be purchased using rollover funds, funds transferred from a tax-qualified savings plan like an IRA, or with a lump-sum distribution from a 401(k) or pension plan.

Guaranteed income for life

Fixed Index Annuities offer a high degree of safety. Your premium and earnings are guaranteed by the issuing life insurance company. They are legally required to set aside assets (known as reserves) to cover the potential claims-paying ability made by their policyholders. These life insurance companies are closely monitored by rating agencies such as A.M. Best, Standard and Poor's, and Moody's.

Grandpa with Grandchildren Annuity Tax Savings
Protect your principal from losing in market volatility

Gain compounded earnings while deferring income taxes

Earnings within an annuity contract grow tax-deferred. This means you don't pay income taxes on the earnings until you withdraw gains from your annuity products account. Therefore, there are no annual 1099 forms to file or earned-interest entries to make on your 1040.

Tax deferral also means annuity earnings do not offset Social Security benefits as with earnings from bonds, CDs, and other investments. An income payment generated by tax-exempt municipal bonds (for which no federal income tax is due) must be counted to determine any offset to Social Security benefits. Investors with investments currently allocated as cash should consider annuities for their tax deferral benefits. Over time, tax-deferred compounding may produce a greater overall return than other non-qualified long-term investments.

Earn higher interest rates

Fixed Index Annuities credit higher interest rates than bank CDs or fixed interest rate-deferred annuities.

Make contributions to your tax-deferred account

Investors who have maximized contributions to their qualified retirement plans such as 401(k)s, IRAs, and pensions, are permitted to contribute without limit to a tax-deferred annuity.

Protect your principal from losing in market volatility

When interest rates trend upward, they often negatively impact government bonds, traditional IRAs, and bond mutual funds. Unlike bonds, annuity accounts are insulated from loss of principal and the stream of income is guaranteed. In addition to offering no loss principal protection, if your annuity contract offers annually renewing rates, you may be presented with higher caps or participation rates, reflecting increased prevailing interest rates. In short, your principal and earnings are protected no matter what direction interest rates may take without losing value when planning for retirement income.

Retired Grandpas Retire early

Tax Savings Investor

Retire early without penalty

Annuity investment products offer valuable tax-savings for employees under the age of 59½ who receive large, lump-sum distributions from their 401(k) profit-sharing retirement plans as part of an early retirement savings or severance package. Such amounts can be structured into an annuity policy without having to recognize taxable income. Penalty-free withdrawals can then be taken by setting up a program known as "Substantially Equal Periodic Payments" (SEPP). This exemption to the IRS pre-59½ early-withdrawal penalty allows you to withdraw money from a tax-deferred account you thought couldn't be touched until retirement.

Satisfy Required Minimum Distributions (RMDs)

Retirees over the age of 70½ are required to begin taking withdrawals from their IRAs or pension plans, known as Required Minimum Distributions (RMDs). The IRS penalty for not doing so is a substantial 50% of any amount that falls short of the Required Minimum Distribution.

IRA funds rolled over into annuity products will be monitored for RMD amounts by a financial professional from the issuing insurance company free of charge. This can save you the annual fee your accountant or attorney would otherwise charge for making these calculations.

  • Guaranteed Lifetime Income
  • Immediate Annuity Income Stream
  • Consistante Monthly Check

Retire with lifetime income

Today, a healthy 65-year-old male has a 25% chance of living to age 90; a 65-year-old woman is likely to live even longer. Retirees concerned about outliving their investments can protect themselves by gaining financial strength with a guaranteed lifetime income stream. By "annuitizing" your IRA or Index funds, you can exchange their value for an "immediate annuity" income stream in any of several forms.

Many FIAs offer optional income riders (may be an additional cost), which provide withdrawal benefits similar to immediate annuities. This type of annuity provides you with a monthly check, guaranteed to remain constant over the duration of your lifetime.

Create a probate-free inheritance

The legal process of going through probate was established to protect a decedent's estate and to ensure its proper distribution of death benefits to designated heirs. Probate can be a time-consuming and expensive experience for heirs to endure.

Purchasing an annuity is one way to protect your beneficiaries from having to undergo this costly delay in estate distribution. Your named beneficiary or beneficiaries are paid death benefits directly and promptly, as soon as the issuing insurance company has been notified of your passing.

 Annuity - Market Protection and Earnings

Annuity - Market Protection and Earnings

Damian Gerry
NPN: 19473448
License: 4038677
Annuity

(619) 322-1404

Retirement Planning

Set aside the appropriate funds for your annuity. Once your goals have been evaluated, and retirement income has been determined, now is the time to ensure you are reserving enough money for your annuity to support you throughout your retirement savings.

Annuity - Market Protection and Earnings

Tax Savings Investor

Life Insurance / Annuity

Introducing What is the difference between a fixed index annuity and a variable annuity?

Fixed Index Annuities are a type of Fixed Annuity that earns interest based on changes in a market index. Even if the market goes down, you lose nothing, due to principal protection.

Variable Annuities earn returns based on the performance of the investment portfolios, known as "sub-accounts", where you choose to put your money. The return earned in a variable annuity isn't guaranteed. The value of the sub-accounts you choose could go up or down due to market volatility. If the value goes up, you profit. If it goes down, you lose money.

Growth is subject to rate floors and caps, meaning it will not exceed or fall below the specified return levels even if the underlying stock indices fluctuate outside of those set parameters. In simplest terms, with this type of annuity the insurance company bears the risk of a sharp stock-market decline. You cannot lose any of your principal with a Fixed Index Annuity, and your upside potential gains are usually capped at a rate between 3% and 9%. Many Fixed Index Annuities also offer premium bonuses, but usually at the expense of lower potential gains. Those bonuses vary among insurance companies.

Reasons to Consider Annuity Products

  • Premium Bonuses
  • Annual Growth

A Fixed Index Annuity is a tax-favored accumulation financial product/ insurance product issued by life insurance companies. It shares features with fixed deferred interest rate annuities; however, the annual growth is bench-marked to a stock market index such as NASDAQ, the NYSE, and the S&P 500, rather than an interest rate.

Here are some of the guaranteed lifetime benefits:

  • Tax deferral investing options

One advantage index funds have over a mutual fund or a bank Certificate of Deposit (CD) is that earnings grow on a tax-deferred basis. This means you pay no income taxes on the growth until you withdraw money from the annuity. This is especially important when you buy your index annuity with personal savings (so-called after-tax or "non-qualified" funds). Index annuities can also be purchased using rollover funds, funds transferred from a tax-qualified savings plan like an IRA, or with a lump-sum distribution from a 401(k) or pension plan.

Guaranteed income for life

Fixed Index Annuities offer a high degree of safety. Your premium and earnings are guaranteed by the issuing life insurance company. They are legally required to set aside assets (known as reserves) to cover the potential claims-paying ability made by their policyholders. These life insurance companies are closely monitored by rating agencies such as A.M. Best, Standard and Poor's, and Moody's.

Grandpa with Grandchildren Annuity Tax Savings
Protect your principal from losing in market volatility

Gain compounded earnings while deferring income taxes

Earnings within an annuity contract grow tax-deferred. This means you don't pay income taxes on the earnings until you withdraw gains from your annuity products account. Therefore, there are no annual 1099 forms to file or earned-interest entries to make on your 1040.

Tax deferral also means annuity earnings do not offset Social Security benefits as with earnings from bonds, CDs, and other investments. An income payment generated by tax-exempt municipal bonds (for which no federal income tax is due) must be counted to determine any offset to Social Security benefits. Investors with investments currently allocated as cash should consider annuities for their tax deferral benefits. Over time, tax-deferred compounding may produce a greater overall return than other non-qualified long-term investments.

Earn higher interest rates

Fixed Index Annuities credit higher interest rates than bank CDs or fixed interest rate-deferred annuities.

Make contributions to your tax-deferred account

Investors who have maximized contributions to their qualified retirement plans such as 401(k)s, IRAs, and pensions, are permitted to contribute without limit to a tax-deferred annuity.

Protect your principal from losing in market volatility

When interest rates trend upward, they often negatively impact government bonds, traditional IRAs, and bond mutual funds. Unlike bonds, annuity accounts are insulated from loss of principal and the stream of income is guaranteed. In addition to offering no loss principal protection, if your annuity contract offers annually renewing rates, you may be presented with higher caps or participation rates, reflecting increased prevailing interest rates. In short, your principal and earnings are protected no matter what direction interest rates may take without losing value when planning for retirement income.

Retired Grandpas Retire early

Tax Savings Investor

Retire early without penalty

Annuity investment products offer valuable tax-savings for employees under the age of 59½ who receive large, lump-sum distributions from their 401(k) profit-sharing retirement plans as part of an early retirement savings or severance package. Such amounts can be structured into an annuity policy without having to recognize taxable income. Penalty-free withdrawals can then be taken by setting up a program known as "Substantially Equal Periodic Payments" (SEPP). This exemption to the IRS pre-59½ early-withdrawal penalty allows you to withdraw money from a tax-deferred account you thought couldn't be touched until retirement.

Satisfy Required Minimum Distributions (RMDs)

Retirees over the age of 70½ are required to begin taking withdrawals from their IRAs or pension plans, known as Required Minimum Distributions (RMDs). The IRS penalty for not doing so is a substantial 50% of any amount that falls short of the Required Minimum Distribution.

IRA funds rolled over into annuity products will be monitored for RMD amounts by a financial professional from the issuing insurance company free of charge. This can save you the annual fee your accountant or attorney would otherwise charge for making these calculations.

  • Guaranteed Lifetime Income
  • Immediate Annuity Income Stream
  • Consistante Monthly Check

Retire with lifetime income

Today, a healthy 65-year-old male has a 25% chance of living to age 90; a 65-year-old woman is likely to live even longer. Retirees concerned about outliving their investments can protect themselves by gaining financial strength with a guaranteed lifetime income stream. By "annuitizing" your IRA or Index funds, you can exchange their value for an "immediate annuity" income stream in any of several forms.

Many FIAs offer optional income riders (may be an additional cost), which provide withdrawal benefits similar to immediate annuities. This type of annuity provides you with a monthly check, guaranteed to remain constant over the duration of your lifetime.

Create a probate-free inheritance

The legal process of going through probate was established to protect a decedent's estate and to ensure its proper distribution of death benefits to designated heirs. Probate can be a time-consuming and expensive experience for heirs to endure.

Purchasing an annuity is one way to protect your beneficiaries from having to undergo this costly delay in estate distribution. Your named beneficiary or beneficiaries are paid death benefits directly and promptly, as soon as the issuing insurance company has been notified of your passing.

Tax Savings Investor

Tax Savings Strategies

Simplified Insurance

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