Fixed Annuities

Fixed annuities are just one class of annuity products. Finding and using the right investment choices nowadays is easy when you have the right professionals to help you understand the many choices available to you. The 401kman can help at this point in your investment or retirement strategy. We help by calculating your expected monthly income in retirement. Don’t forget to take into account future issues, such as rising prices and unforeseen health-care expenses.

Annuities provide a true benefit with a stream of income in retirement. A fixed annuity provides you with a floor or guarantee of some form of return on your contribution. Fixed annuity providers will remove the risk of investment loss for you through a contract with you which basically states they will give you (X) amount of dollars back over time for your contribution. Now that may sound a bit oversimplified of an explanation but it is fairly close to how most of the basic fixed annuity platforms are offered. There are three major classes of annuity products which are fixed, indexed and variable.  

Annuities are commonly misunderstood with the many different groups of financial planners vying for a place to place your money into while preparing for retirement. Brokers will often try to steer clients into other forms of investment which may or may not be as suitable due to losses based on the markets fluctuations.  Investors looking for a tax-deferred investment with a fixed rate of return will find fixed annuities safer and much more rewarding than investing in the markets or a banks Certificate Of Deposit.

 

Key Fixed Annuity features

1. Fixed rate of return, regardless of market volatility

3- to 9-year initial rate guarantee, but can vary greatly depending on the issuer

Tax-deferred investment growth

No IRS contribution limits, 

At the end of the rate guarantee period, your options may include:

  • Renewing or exchanging your annuity.

  • Moving the assets to an IRA (for pre-tax dollars only).

  • Using the assets to generate an income stream.​

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Too often the retirement planning conversation focuses on accumulation - growing the pool of savings to have a larger pool to “draw down” in retirement. But this model forgets one important fact: the need for regular, reliable monthly income — income you can budget on – doesn’t go way when you retire.

What if my expected monthly income is less than what I need to last my lifetime? If income from your current savings and investments, when combined with Social Security, is not enough to meet your monthly retirement income needs and you are concerned about outliving your retirement savings,  The best solution to consider is an annuity, which can provide protected monthly income to supplement your savings and investments and Social Security

There are a range of different types of annuities, All of which offer protected lifetime income. Depending on the type of annuity you choose and the benefits or riders offered, 

What if I need access to my money in an annuity? With all investments, it is important to consider when you will need to access your money. Some annuities carry withdrawal or surrender charges that may limit when you can access your money without incurring a charge if you decide to take some early.This however can be done penalty free under certain circumstances.

Be sure to ask how this works. Be sure to ask what, if any, costs are associated with withdrawing money early; for example, in the case of unexpected expenses such as health care or long-term care needs. If you want protected income to be received right away, make sure you understand all your options. Can annuities help protect me from investment losses? Annuities can provide you with monthly income that’s protected from market volatility. Some annuities can also protect your principal from losses. Be sure to ask about and discuss the variety of annuity options with your financial advisor How do I know that my protected income is safe? 

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