An annuity can provide your spouse and yourself a guaranteed stream of income on an annual basis, consider it a Modern Pension Plan. The reason that the annuity can guarantee your money is because this investment vehicle was designed and is backed by the insurance company that is responsible for underwriting the policy. Well established insurance companies like the ones that we work with for our clients with offer a series of options to select if you find that an Annuity is right for you. Chances are that you want a licensed professional that will tell you exactly how annuities work.

Here are 5 Ways an Annuity Can Work for You!

Most people would ask: How Does An Annuity Work?

Well simply explained an annuity is an insurance contract whereby you are agreeing to invest a portion of your retirement income into the annuity, either with one large payment (your principal deposit) or a sequence of payments over time. When the terms on the Annuity are complete and you have reached the agreed upon age to begin drawing on your money the annuity allows you to accept up to 10% on the disbursement amount as a retirement income that is tax deferred. In a second scenario you can choose the predetermined annual payment amounts to create what we would call a modern day pension plan. That’s exactly how annuities work.

How An Annuity Works To Protect Your Retirement Savings

The nicest parts of an annuity are that the insurance company holding the annuity policy guarantees the payments to be made regardless of whether the stock market is up or down. So in a situation similar to 2008, there would not be a substantial loss had your money been partially invested in an annuity. Those funds would remain protected from the losses suffered in mine or your traditional 401K or IRA. The investment into a 401K or IRA is one with a higher risk. The fixed index annuity is a safe and secure way to protect a nice portion of your total retirement funds.

Additionally a fixed indexed annuity or an indexed annuity can guarantee that your annual disbursements will not decrease their annual payment in amount in the event of a spouse passing on. Both you and your spouse will be paid the same amount through both of your lives regardless of which of you lives the longest.* The remaining balance of the annuity after both parties are deceased will be passed on to the beneficiary to carry on the legacy of good money management and retirement planning skills within said families worldwide.

*Depending on the policy terms that you have selected, our company offers multiple options where both spouse and annuitant can receive the regular scheduled payments regardless of a death, based on the policy contract agreement.

5 Ways An Annuity Can Work for You

Modern Day Pension Plan: No longer are the days of working as an employee for over 30 years and being handed a pension. With an Index Annuity or a Fixed Index Annuity you can save and protect 40% of your retirement to guarantee yourself and your spouse a pension payment for both of your lives.

Guaranteed Income for You and Your Spouse: You and your spouse are guaranteed a set amount paid annually as per the contract and amounts that you have delegated to deposit into your annuity.

Still Participate In The Stock Market: A fixed index annuity and an index annuity are still allowing you to receive a portion of the gains in an uptrend market. When the market goes down, your gains are locked in and protected by the annuity structure so that you cannot lose your principal balance as would be the case in a 401K type of investment vehicle in the event of a market crash like 2008.

A Fair Return On Your Retirement Savings: You cannot receive the full amount when the stock market is on an uptrend but your rate of return when investing in an annuity is far higher in most cases than traditional forms of savings: CDs, bonds, IRAs, etc.

Guaranteed Principal Protected Investment for Your Retirement Savings: The annuity policy is an insurance policy that is guaranteed to make an annual payment to you, up to 10% annually after the annuity has matured. Our company offers a complementary investment planning and one-on-one look into your retirement and how well you can protect 35-40% of the funds so that you will never run out of money in your lifetime.

Please contact us to discuss which retirement investment vehicles can best protect you from a stock market crash like the one that we experienced in 2008. We will be happy to tell you everything that you need to know about How Does An Annuity Work?