We believe these complex products are unfortunately often misused and over-sold. Because many annuities carry surrender penalties, it is critical to know what you are getting before you buy. Despite their sometimes-poor reputation, annuities can have value if used in the right situation. If they are sold incorrectly, they can become a burden. If you are considering an annuity let us help you decide if it’s appropriate for you. Whether variable, fixed, indexed, or immediate, annuities can be prescribed for a multitude of reasons and can perform a valuable service not found in other products. Let us help you decide if these products are right for you and if not, help you choose another course.
Please call or email us for more information on Annuities and how we can help.
Disclosure: Investments and account types mentioned may not be suitable for all investors.
Variable annuities are long-term investment alternatives designed for retirement purposes. Withdrawals of taxable amounts are subject to income tax and, if made prior to age 59 1/2, may be subject to a 10% federal tax penalty. Early withdrawals may be subject to withdrawal charges. Partial withdrawals may also reduce benefits available under the contract as well as the amount available upon a full surrender. An investment in variable annuities involves risk, including possible loss of principal. The contracts, when redeemed, may be worth more or less than the original investment.
A fixed annuity is a long-term, tax-deferred insurance contract designed for retirement. It allows you to create a fixed stream of income through a process called annuitization and also provides a fixed rate of return based on the terms of the contract. Fixed annuities have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you’re not yet 59½, you may also have to pay an additional 10% tax penalty on top of ordinary income taxes. You should also know that a fixed annuity contains guarantees and protections that are subject to the issuing insurance company’s ability to pay for them.
Index annuities are contracts issued by an insurance company that offer earning potential linked to participation in the growth, if any, of an index or benchmark. All deferred annuities are long-term investment alternatives designed for retirement purposes. All annuity contract and rider guarantees, or annuity payout rates, are subject to the claims-paying ability of the issuing insurance company, which is solely responsible for obligations under its contracts. Withdrawals will generally be subject to a surrender penalty if redeemed during the surrender charge period and if they are in excess of any free withdrawal provisions. Since annuities grow tax-deferred, any withdrawals made prior to age 59 1/2 may be subject to a 10% federal tax penalty on top of ordinary income taxes being taxed as ordinary income. The S&P 500 index is an unmanaged index of 500 widely held stocks. Investors cannot invest directly in an index.