Annuities are products that are issued by an Insurance Company. While annuities are not for everyone, they can be a very important part of one's retirement strategy. Basically, how they work--you would invest a sum of money (either a lump sum or a continual monthly or yearly amount) that would later produce a yearly, or monthly stream of income back to you (Or , it could be passed on to your beneficiary). Your income stream can start immediately (Immediate Annuity), or you can begin to take distributions at a later time (Deferred Annuities). It can be structured in a way that allows you to take your distributions for the rest of your life (an income that you cannot outlive) or for a certain period of time.
Fixed Annuities: These investments are available in various time frames, including 3, 5, 7, 9, and 10 years. Your principal investment and your annual gains are guaranteed by the Insurance Company. They offer a guaranteed rate of return each year in the form of interest. Your money grows tax deferred. Most annuities allow you to take a yearly distribution (usually 10%) without any kind of penalty.
Index Annuities: Like fixed annuities, this type of annuity comes with a guarantee of principal and a guarantee that any gains that are accumulated on a annual basis will never be lost. They do not guarantee a gain each year, but they do guarantee that you will never lose money. Your investment is tied to the market (usually the S&P 500 Index) but not actually in the market. This product has a lot of moving parts and the investor needs to be sure he/she has a good understanding of the various features that make up this investment.
Beacon Research recently reported that fixed index annuity sales hit a record
in the third quoter of 2015, up 14.5% versus the previous quarter.
Office: (731) 660-3779
Cell: (731) 217-1731
319 Vann Drive
Jackson, TN 38305
Click Here to Email Us