Annutities

I have talked with many clients that do not understand what an Annuity is about, and some just flat out do not trust them. Did you know that the Government passed a mandatory law in 1935 and started collecting money in 1937 from American citizens for an Annuity? It was called Social Security, sound familiar.

Most of my Medicare clients have one or more CD’s. The main difference between a CD and an Annuity is that the CD is more of a short to medium term investment and the Annuity is usually for a long-term investment.

Both are insured or guaranteed by the FDIC up to $250,000 but a 401k or IRA is not. Converting your CD to an Annuity is a simple way to protect your money and have a better long-term rate of return.

Annuities are broken down into two types based on what you are trying to accomplish. If you are looking for safety a Fixed Annuity is best. If you are looking for investment growth a Fixed Indexed Annuity is best.

A Fixed Annuity is a long-term investment that allows your assets to grow at a fixed rate of return over time and is tax deferred. When you retire and start taking withdrawals, you most likely will be in a lower tax bracket.

A Fixed Indexed Annuity allows you to earn a better rate of return for a specific period and is tied to the stock market. Like a Fixed Annuity or CD, your principal is protected from loss and is tax deferred.

If you currently have an Annuity, it is a real quick process to evaluate what you currently have and see if there is a better rate of return with a different Annuity. If you about to retire, you can convert your 401K or IRA into a ROTH IRA to protect your money and start an Annuity for long term income growth.