Retirement is no longer as certain as it once was: pensions and 401(k) plans aren’t offered by all employers and when they are, they come with heavy taxes and can be at risk in the market. People are also living longer due to advances in medicine, so outliving financial resources is a real concern for most Americans. An annuity can be a great solution to these problems because it is a secure investment that can guarantee income for your retirement.
If you don’t want to risk losing part of your retirement savings in equity based products with the risk of market losses, an annuity is a great alternative. Fixed and Index annuities offer protection for your principal as well as the gain you receive each year. Your money is never at risk due to market losses because there are minimum guarantees in the contract that protect you.
As you know, the United States population is aging and people are living longer. More than 8,000 people turn 65 every day and more people are living into their 80s and 90s. It’s a realistic concern that you’ll outlive the money you have saved for retirement. Many of the annuity products that we offer come with a guaranteed retirement income that cannot be outlived, no matter how long you live or how much retirement savings you have accumulated!
Annuities are tax deferred, meaning the money will accumulate without you having to pay tax on the gain until the money is withdrawn in the future. Tax deferral can be a huge benefit. For example, if you have $100,000 & it grows at 7% each year before taxes, assuming you’re in a 25% tax bracket, in 25 years you would have $542,743 saved in a tax-deferred vehicle ($407,057 after taxes on the gain) versus only $359,379 in a taxable savings account.
Annuities also avoid the costs & delays of probate, giving your loved ones access to the funds quickly when you pass away, if you haven’t used all of the cash value during retirement.