The US is Broke and Annuities could be the answer for your money.
Triple Compounding
"One of eight wonders of the world: tax-deferred compound interest" Albert Einstein
Interest
Interest on your Interest
Interest on money that you would have paid in taxes.
Annuities can be great retirement tools for people that want to defer paying taxes on money they are not using and also guarantee an income they cannot outlive. It is the insurance version of a pension for the rest of your life. When someone wins the lotto or lottery, that state puts that money into an annuity for payments to the winner for the rest of their life.
What are Annuities?
An annuity is an insurance product that is sold by insurance companies that grows on a tax-deferred basis and it can create an income stream that you cannot outlive. Annuities are very popular for people who want a steady stream of income now or in the future.
Here's how they work:
You give the insurance company a premium and then they will make payments to you now or in the future. Distributions from an annuity can be monthly, quarterly, and annually.
Size of payments:
The sizes of the payment you receive are determined by a few factors.
1. Your age when you take the payments. The older you are the more money you will receive.
2. Length of payment. If you opt for lifetime your payments will be lower due to the company being on the hook for the rest of your life verses a payment for 10 years only.
3. The interest rate environment. A lower interest rate environment at the time you buy the annuity will determine your rate now even if you start to take an income 10 months from the day you bought it. It works both ways and you can purchase cost of living increases.
Types of Annuities
Immediate Annuities
With Immediate Annuities, you will begin payments immediately or you can have the payments delayed for up to a year. Some carriers allow you to defer taking the income stream to up to a year. It is not recommended to buy an immediate annuity and then delay the income. If you need the income, take it right away.
Deferred Annuities
Deferred Annuities are by far the most popular annuities. For a few reasons:
€ You can defer taking payments for as long as you want until you are 70 .
€ Your money is placed in annuity so that it can grow tax deferred.
€ Deferred annuities can be converted to immediate annuities when you need it. This is called annuitization.
€ Upon your death, the money will go probate free directly to your beneficiaries.
Within the realm of annuities, there are fixed annuities, fixed index annuities, and variable annuities.
In addition to tax deferral and income, an annuity can be a used for generational planning. When the owner dies the proceeds will pass probate free to the beneficiaries just like a life insurance policy. If you don't have a trust, the state in which you live does. It is called probate. Annuities can not be contested and you can also choose a payout option so you can control the payments from the grave. This is also particularly attractive for people who are afraid that their beneficiaries will not know how to handle the money and are afraid they will spend it right away.
Annuities can be very good retirement planning tools and should be considered in your overall portfolio. You should research the health and ratings of the carrier you go with as well as the length of years that fits your needs.
"One of eight wonders of the world: tax-deferred compound interest" Albert Einstein
Interest
Interest on your Interest
Interest on money that you would have paid in taxes.
Annuities can be great retirement tools for people that want to defer paying taxes on money they are not using and also guarantee an income they cannot outlive. It is the insurance version of a pension for the rest of your life. When someone wins the lotto or lottery, that state puts that money into an annuity for payments to the winner for the rest of their life.
What are Annuities?
An annuity is an insurance product that is sold by insurance companies that grows on a tax-deferred basis and it can create an income stream that you cannot outlive. Annuities are very popular for people who want a steady stream of income now or in the future.
Here's how they work:
You give the insurance company a premium and then they will make payments to you now or in the future. Distributions from an annuity can be monthly, quarterly, and annually.
Size of payments:
The sizes of the payment you receive are determined by a few factors.
1. Your age when you take the payments. The older you are the more money you will receive.
2. Length of payment. If you opt for lifetime your payments will be lower due to the company being on the hook for the rest of your life verses a payment for 10 years only.
3. The interest rate environment. A lower interest rate environment at the time you buy the annuity will determine your rate now even if you start to take an income 10 months from the day you bought it. It works both ways and you can purchase cost of living increases.
Types of Annuities
Immediate Annuities
With Immediate Annuities, you will begin payments immediately or you can have the payments delayed for up to a year. Some carriers allow you to defer taking the income stream to up to a year. It is not recommended to buy an immediate annuity and then delay the income. If you need the income, take it right away.
Deferred Annuities
Deferred Annuities are by far the most popular annuities. For a few reasons:
€ You can defer taking payments for as long as you want until you are 70 .
€ Your money is placed in annuity so that it can grow tax deferred.
€ Deferred annuities can be converted to immediate annuities when you need it. This is called annuitization.
€ Upon your death, the money will go probate free directly to your beneficiaries.
Within the realm of annuities, there are fixed annuities, fixed index annuities, and variable annuities.
In addition to tax deferral and income, an annuity can be a used for generational planning. When the owner dies the proceeds will pass probate free to the beneficiaries just like a life insurance policy. If you don't have a trust, the state in which you live does. It is called probate. Annuities can not be contested and you can also choose a payout option so you can control the payments from the grave. This is also particularly attractive for people who are afraid that their beneficiaries will not know how to handle the money and are afraid they will spend it right away.
Annuities can be very good retirement planning tools and should be considered in your overall portfolio. You should research the health and ratings of the carrier you go with as well as the length of years that fits your needs.