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Annuity

Retirement and Annuities

In our parents’ era, retiring comfortably at age 65 was fairly straight forward—they relied upon a pension to provide one-third of their retirement income, Social Security for another third, and their own savings for the final third. Today, the retirement equation is a whole lot more complicated.

The Ideal Retirement

For most Americans, the ideal retirement includes these four main characteristics:

  • Safety – They don’t want to lose their hard earned money, especially knowing they can’t re-earn it.

  • Growth – Eighty percent of those surveyed said they prefer moderate growth with safety instead of higher potential with risk and volatility.

  • Tax Management – Most people believe taxes will go up in the future, so their ideal retirement strategy offers a way to control or limit taxes.

  • Liquidity – Those nearing retirement want a strategy that enables them to live confidently throughout retirement, taking income as necessary.

Take Control

How would you feel if you knew that your money would never again take a plunge because of market swings? If you are tired of the market’s roller coaster ride, but want more growth than the minimal returns that bank CDs offer, then annuities may be a good fit for you. Take control over your retirement without having to spend your time studying the market and guessing its next move.

An insurance product does exist that enables you to protect your savings, earn steady growth and have funds available when you need them. It’s called a Fixed Indexed Annuity. Linking an index with a Fixed Indexed Annuity insurance product provides protections from market volatility and can be a “safety net” for your savings, while providing opportunity for competitive growth within the context of an insurance product.

One study by Zebra Capital and Roger Ibbitson, finance professor at Yale, found that historically, Fixed Indexed Annuities can potentially out-perform bonds with better downside protection4. If you are tired of market volatility, but want more growth than the minimal returns that bank CDs offer, then a Fixed Indexed Annuity insurance product may be a good fit for you.

Learn More about FIAS

An annuity is an insurance contract between you and an insurance company that is designed to help meet retirement and other long-range goals. To fund an annuity, you can either transfer your money in one large payment or you can make a series of payments.

In return, the insurance company agrees to pay you a specific amount of income per month, quarter, or year. This income can start immediately or at some future date, depending on the type of annuity you purchase and the options available within that annuity. Income is paid for either a chosen period of time or even for the remainder of your life. An annuity is an insurance product and is sold by licensed insurance producers.

The purchase of an annuity insurance product is one of the fastest-growing retirement strategies in the U.S. Last year, consumers moved more than $230 billion dollars out of the stock market or banks and into the purchase of annuities … to reduce or eliminate risk and to get their savings growing again. A recent Gallup Poll of over one thousand annuity owners reveals a striking contrast between the American population at large and those who purchase an annuity. While most national polls show a decline in consumer confidence in retirement, more than half of annuity owners believe that they have enough or more than enough money to cover their financial needs in retirement. Ninety-three percent are happy with their annuity purchases and still own their first.

At this point, the process for getting more details on annuities consists of you and I meeting for an initial discussion. This is not a sales meeting, but rather a time for you to talk about your current situation and future goals, as well as ask questions you may have from this course. If your questions are answered to your satisfaction and we both agree that moving forward with another meeting would make sense, then we will schedule that at the end of our first meeting. There is no obligation in this first meeting. The goal is for you to explore your options and decide how you would like to proceed.
 
Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

At this point, the process for getting more details on annuities consists of you and I meeting for an initial discussion. This is not a sales meeting, but rather a time for you to talk about your current situation and future goals, as well as ask questions you may have from this course.

If your questions are answered to your satisfaction and we both agree that moving forward with another meeting would make sense, then we will schedule that at the end of our first meeting. There is no obligation in this first meeting. The goal is for you to explore your options and decide how you would like to proceed.

Retirees, pre-retirees, and even people still accumulating for a far-off retirement have decided that an annuity is suited for their situation. The most important step is to confirm that an annuity insurance product, or any other financial product considered, is in alignment with your goals and is suitable for your unique situation. If your goals align with the ideas of keeping the money you have, growing your money without the risk of market volatility, controlling or limiting taxes, and keeping comfortable access to your money, than an annuity insurance product may be the right fit for you. Of course, not everyone in every situation will be best served by purchasing a Fixed Indexed Annuity insurance product. That is why discussing your unique situation with us in a one-on-one scheduled appointment is crucial after learning about annuities on this website.
 
Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.
The Quick Benefits Fixed Indexed Annuities cannot lose money through market volatility because they are an insurance product and not an investment. Fixed Indexed Annuities have averaged an 8.6% return over the past 14 years, outperforming the overall return of the S&P 500 (Click here to see the study in the Journal of Financial Planning). Annuities grow tax-deferred, which means you don’t pay taxes until you access your money in the future, when your tax bracket should be lower. Many annuities provide you with the contractual option to withdraw 10% or more of your account each year without penalty. Fixed Indexed Annuities can be structured to provide a contractually guaranteed stream of income for life. Innovation For nearly one hundred years, Fixed Annuities have provided yields averaging between two and five percent under the terms of the Fixed Annuity contract. Introduced in 1995, the Fixed Indexed Annuity contract provides greater flexibility and options for purchasers beyond that of the traditional Fixed Annuity contract. A Fixed Indexed Annuity gives you the option of linking the return, paid to you under the terms of the Fixed Indexed Annuity insurance product, to an index like the S&P 500. This innovation provides the qualified purchaser with an array of contractual options that simply didn’t exist before the introduction of the Fixed Indexed Annuity. Achieve Your Goals Everyone’s retirement situation is different and as with any financial product, including an insurance annuity product, it’s important to determine your suitability for the product given your unique circumstances and your retirement goals.
 
Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.
Retirees, pre-retirees, and even people still accumulating for a far-off retirement have decided that an annuity is suited for their situation. The most important step is to confirm that an annuity insurance product, or any other financial product considered, is in alignment with your goals and is suitable for your unique situation. If your goals align with the ideas of keeping the money you have, growing your money without the risk of market volatility, controlling or limiting taxes, and keeping comfortable access to your money, then an annuity insurance product may be the right fit for you. Of course, not everyone in every situation will be best served by purchasing a Fixed Indexed Annuity insurance product. That is why discussing your unique situation with us in a one-on-one scheduled appointment is crucial.
 
Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

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Securities and Investment Advisory services offered through Brokers International Financial Services, LLC Member SIPC Brokers International Financial Services, LLC and Pearce Financial Services are not affiliated companies
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Pearce Financial Services does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.

Not associated with or endorsed by the Social Security Administration or any other government agency. The Retirement Analysis gives estimates based on your actual Social Security earnings record. Please keep in mind that these are just estimates. We can’t provide your actual benefit amount until you apply for benefits. And that amount may different from the estimates provided.

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