|
 |
 |
|
| Annuity: |
| Whether your goal is saving for retirement or you've already reached that goal and you want to be sure that you will never outlive your savings, an annuity may be just what you're looking for. |
|
Annuities can be a key component of your overall retirement savings plan. Annuities enable you to save money on a tax-deferred basis, so all of your money can work for you now. No taxes are due until you begin to
withdraw
which may grow for you. Annuities are a form of contract issued by life insurance companies that pro your money, which can be years later. With annuities, there is more
promise
to make payments at a future date. |
|
| When you're ready to receive income, generally in retirement, annuities can provide you with a variety of income choices, including a guaranteed income that you can never outlive. In addition, if you die before income payments begin, many variable annuities provide a death benefit that guarantees your beneficiaries will never receive less than the amount contributed to the contract, less any withdrawals or fees. |
|
| There
are two primary types of annuities. |
-
A deferred annuity is a type
of long-term personal retirement account designed
to help grow your assets, and provide a steady
income stream once you are retired. A deferred
annuity has two phases: the savings and investing
phase, and the retirement income phase. All of
your earnings are tax-deferred, which means you
don't pay any taxes on your earnings until you
withdraw your money, usually at retirement. Amounts
withdrawn prior to age 59½ are generally
subject to a 10% federal income tax penalty as
well as ordinary income taxes.
-
Immediate annuities are designed to provide you with regular income payments for your life or for your life and that of a loved one, some with the choice of various refund options. It can also provide income for a set period of time only. This kind of arrangement is ideal for people who want an income with many flexible options.
|
|
|
| Why Supplement Your Retirement Savings? |
Today, many investors will need to rely on their own investments to fund a comfortable retirement and protect themselves from outliving their assets. |
|
| Consider the following: |
-
Retirement Plans Limit Your
Contribution: Your
employer-sponsored plan, such as a 401(k),
403(b) or Keogh, has limits on the amount
of money you can contribute each year. If
you are still working, you may benefit by
contributing the maximum amount you can to
these plans. Because your contribution is
limited, however, the amount you receive
at retirement is also limited. You may want
to supplement this plan with a non-qualified
tax-deferred annuity. Unlike employer-sponsored
plans and IRAs, there is virtually no limit
on the amount you can contribute to a non-qualified
annuity.
Social Security and Pensions May Not Be Enough: Your Social Security and pensions may provide only a little more than half of a typical retiree's income needs.
-
Life Expectancies are Increasing: People are living longer, which means your retirement assets may need to last 20 to 30 years, or more.
-
Inflation Can Erode the Value of Money: To
maintain your purchasing power, your assets
need to grow equal to or faster than, the rate
of inflation. Even if inflation averages just 4% per year, your
purchasing power may
be cut in half in almost
20 years.
-
Tax Deferral Grows Your Money Faster: An important benefit of annuities is tax-deferred growth. Tax deferral means that you do not pay taxes on your earnings until you withdraw your money, usually at retirement. At that time, only your earnings are taxed. Because your earnings are not reduced each year by taxes, they can compound faster. Over time, tax-deferred compounding of your investment returns can provide a greater growth potential than a similar investment that is taxed every year.
|
|
| Unlike most of the previously mentioned savings and investment vehicles, contributions to annuities are made on an after tax-basis (where they're not part of a qualified retirement plan) so they will not reduce your current taxable income. However, annuity earnings are tax-deferred for individuals, and so they warrant consideration when planning for retirement. |
|
| Only annuities provide the retirement income options that can protect you from outliving your assets. Annuities can complement your other retirement plans by providing the benefits of tax-deferred growth, retirement income options and flexibility. Variable deferred annuities also offer investment choices and beneficiary protection in the form of a guaranteed death benefit to help you build extra retirement income. |
|
| You select an option for investing your retirement monies by choosing a fixed or variable deferred annuity. |
|
-
A fixed annuity means the initial interest rate earned is set when the money is contributed. New interest rates are set from time to time. While this kind of funding vehicle protects you from any downturns in the market, it doesn't allow you to take advantage of possible market upswings.
-
A variable annuity gets its
name from the fact that earnings reflect returns
on the funding options you've chosen for the
annuity, and the earnings will fluctuate based
on the investment results of the underlying funding
options. As a result, your account value may
increase or decrease. There is no guarantee as
there is with a fixed annuity; although most
variable annuities guarantee at least the principal
if you die, regardless of investment results.
Ordinary income taxes on earnings are generally
due upon withdrawal. Withdrawals prior to age
59½ may be subject to a 10% tax penalty.
|
|
|
| Discuss the role of annuities in your Retirement Planning
with a CERTIFIED
FINANCIAL PLANNER ™ CFP®,
to make sure you understand all of the options and make the smartest decisions for your financial needs. For more information, and a proposal of an annuity contract, please complete the Registration Form below or Call (973) 836-0310 or e-mail:
annuity@horizoncoast.com to setup a confidential consultation. |
| |
| Securities, Mutual Funds, Investment, and Insurance Products: |
| Not FDIC Insured or any Federal Government Agency |
May Go Down or Lose In Value |
Not a Deposit or Guaranteed by the Bank or any Bank Affiliate |
|
|
|
|
|
