Annuity is a contract between you and an insurance company. An annuity allows your contributions to grow in a tax-deferred or tax-free status in the case of a ROTH. This taxation status is a very powerful feature and allowes you to grow and compound wealth like no other retirement income tool. An annuity is like a private pension plan. they can pay you yearly, monthly or quarterly distributions or lump sums. There is a ton of flexibility when it comes to distributions. How much the annuity will pay you is based on several factors and your annuity specialist can best show you those numbers.

Annuities can have an accumulation phase where nothing is scheduled to be drawn from them, they can have immediate payouts,

Annuities can be complex but Top annuity Source’s professionals can assist in making the decision and design of the annuity smooth for you.

Annuities have an accumulation phase and a payout phase.

During the accumulation phase, the annuity is being contributed to and getting compounding growth as tax is being deferred or tax-free in the case of a ROTH annuity. During the payout phase, the annuity is paying out the annuitant an income. Depending on how the annuity is structured the payouts can be monthly, semiannual, annual, or as needed keeping in mind the minimum required distributions required by the IRS.

Annuities make it possible for anyone to create a private pension for themselves.

There are fixed annuities, variable annuities, fixed index annuities.

Fixed annuities: These provide a guaranteed growth across your annuity amount each year regardless of what the stock market is doing. This amount is guaranteed by the insurance company. So, it’s possible to have a 3-5% return in a fixed annuity in the same year that co-workers or other retires 401K and IRAs were reduced by 20%

Variable annuities: We cannot recommend variable annuities; they do not offer principal protection and can lose money. There are much better retirement tools available than a variable annuity. We put our clients and their retirement wellbeing first, so we do not believe these are a good fit for most people saving and investing for retirement.

Fixed Index Annuities (FIA): The FIA is a powerful retirement tool that allows your annuity funds to be indexed to an index like the S&P500 which historically has performed the best. The indexing option still allows your funds to stay free from losses. So even if the stock market is declining you will never take a loss or your annuity funds.

Many times, funds in an annuity can also be spread across different indexing options and fixed account options so that each and every year you can have phenomenal growth in your annuity.

Examples:

$2,000,000 IRA 20% loss= -$400,000 New Balance $1,600,000 and a retirement income that was $70,000 a year is reduced by 10 years

$2,000,000 Annuity 5% gain = $2,100,000 no years of retirement lost.

There are two most common ways to start an annuity.

1. A qualified rollover where you have a retirement account in place and the receiving insurance company agrees to receive your qualified retirement funds from an IRA, 401K, or a ROTH IRA and funds the annuity with the proceeds from your rollover account. In the case of a traditional 401K or IRA you usually will have zero tax burden at the time of the rollover since your funds are going from one qualified account to another (The annuity)

2. The second most common way is to fund the annuity with a check or ACH/bank/electronic check transfer from your checking or savings account.

* Section 1035 of the Internal Revenue Code

If you’d like to discuss this further, please contact us to speak to a licensed Annuity Alliance specialist.

What benefits do annuities have that I can benefit from?

Annuity benefits are vast.

• Guaranteed lifetime income

• Protection from losses that occur in accounts that are 401K’s ROTH IRA’s and traditional IRA’s.

• Indexing options so you can get similar gains to the stock market.

• Tax-free growth and income in the case of a ROTH.

• Tax deferral allows your principal to compound leading to a larger retirement annuity to pull from.

• Pass on the remainder of your legacy to beneficiaries tax-free.

• Liquidity to access portions of funds without penalties.

• No Management fees eating into your retirement portfolio

We believe annuities are extremely powerful retirement tools. Annuities include features that are not available in 401K’s and IRA’s. The features listed here make it a no-brainer to get an annuity

This is a very common question. There are several factors that make this decision to purchase an annuity a little different for each person. Factors that make this answer so unique are:

1. Age

2. Legacy planning

3. Financial needs in retirement

4. Available Pension payouts

5. Social Security

6. Spouse that needs retirement funding

7. Risk Tolerance

There are several funding and income types and combinations. Typically nothing is cookie-cutter.

General and immediate annuities cover the two types.

Immediate Annuities: You fund the annuity contract which can be a rollover of funds from another qualified retirement account, or from a checking account. THen Immediate There are two main types of annuities: deferred and immediate.
With an immediate annuity, your income payments start right away. You choose whether you want income guaranteed for a specific number of years or over your lifetime. The insurance company calculates the amount of each income payment based on your purchase amount and your life expectancy.
A deferred annuity has two phases: the accumulation phase, during which you let your money grow, and the payout phase, during which you begin to receive scheduled payments. During accumulation, earnings grow tax-deferred until withdrawn. You decide when to take income from your annuity, and therefore when to pay the taxes. The payout phase begins when you withdraw income from your annuity, and for most people, this is during retirement. As your needs dictate, you can take partial withdrawals, completely surrender your annuity, or convert your annuity into a stream of income payments (known as annuitization). This last option is essentially the same as buying an immediate annuity.

Annuities and life insurance are both financial products that can be used to help plan for the future, but they are quite different in terms of how they function and what they offer.

An annuity is a financial contract between an individual and an insurance company, in which the individual makes a lump sum payment or a series of payments, and the insurance company agrees to make periodic payments to the individual for a certain period of time. The payments can be for a fixed amount or can vary depending on interest rates or investment performance. Annuities are often used as a way to create a steady income stream during retirement.

Life insurance, on the other hand, is a contract between an individual and an insurance company, in which the individual pays a premium and the insurance company agrees to pay a death benefit to the individual's beneficiaries upon the individual's death. The death benefit is designed to provide financial protection for the policyholder's family and loved ones in the event of their unexpected death.

So, while an annuity is designed to provide an income stream during the policyholder's lifetime, a life insurance policy pays out a death benefit when the policyholder dies. The two products have different purposes, therefore they may be appropriate for different financial needs and goals.

Additionally, annuities can have different types, such as fixed or variable, and also have different features that can affect the payments received and the tax implications, life insurance policies also have different types, like a term or permanent. It's worth considering your financial situation, goals, and objectives to decide which one fits your needs better.

A variable annuity is a type of annuity contract that allows the policyholder to invest their premium payments in a variety of underlying investment options, such as mutual funds or exchange-traded funds. The value of the annuity and the income payments received by the policyholder will depend on the performance of these underlying investments.

Unlike fixed annuities, which provide a guaranteed rate of return, the returns on variable annuities can fluctuate based on the performance of the underlying investments. This means that the value of a variable annuity can increase or decrease over time, depending on the performance of the underlying investments.

One of the advantages of variable annuities is that they can provide the policyholder with the opportunity to participate in the potential growth of the stock market, which can lead to higher potential returns over the long term. They also usually offer a death benefit, which means that the beneficiaries receive at least the amount of the investment even if the market is down at the time of the policyholder's death.

However, variable annuities also have several disadvantages, such as high fees, taxes on gains, and also the risk of losing principal, just as with any other market-based investments. The fees and charges associated with variable annuities can be quite high and can eat into the returns of the underlying investments, reducing the overall returns received by the policyholder.

Before deciding if a variable annuity is good for you, it's important to carefully consider your investment goals, risk tolerance, and time horizon, as well as the fees and expenses associated with the contract. Additionally, it is always recommended to consult with a financial advisor to determine if a variable annuity fits with your overall financial plan.

Insurance companies are generally considered to be stable and reliable when it comes to honoring the contracts they make with policyholders.

Insurance companies are heavily regulated by state and federal government agencies and are required to follow strict financial and operational guidelines. They are also required to maintain a certain level of financial reserves, called capital and surplus, to ensure they have the funds to pay out claims to policyholders.

Additionally, most insurance companies are members of state-sponsored guarantee funds that provide an extra layer of protection for policyholders. These guarantee funds step in to help pay out claims if an insurance company is unable to meet its obligations.

However, there is always a risk that an insurance company might become financially unstable, particularly in cases of severe economic downturns or natural disasters that can lead to a high volume of claims. While these are not common occurrences, it is important to be aware that they do happen. In the case of an insurance company's failure, the state's guarantee fund will help with paying out the claims.

It is important to research the financial stability of any insurance company before purchasing a policy. Information about an insurance company's financial stability can be found on the company's annual reports, as well as rating agencies such as A.M. Best, Moody's, and Standard & Poor's. These agencies rate insurance companies based on their financial strength and creditworthiness.

It is also worth considering purchasing policies from companies that are financially stable and have a good reputation. Having the peace of mind of knowing that the company you are entrusting your financial safety with, is in good shape and has the means to honor their end of the contract can be important.

The tax advantages of owning an annuity are one of the largest benefits that ensure you do not outlive your retirement funds. Taxes inside the annuity are deferred. So no tax burden on the growth of your annuity funds will happen until regular disbursements occur. If the owner passes away the funds can be passed onto the family tax-free, even if the funds were started with qualified funds. This is a great way to leave a legacy without a tax burden on your beneficiaries.

When an individual who owns an annuity dies, the funds in the annuity will typically be distributed to the beneficiaries designated by the policyholder. The specific way the funds are distributed will depend on the type of annuity and the terms of the policy.

There are several types of annuities and each of them has different rules and options on how to handle the money when the owner passes away:

• Immediate Annuities: An immediate annuity typically pays a fixed income to the policyholder for a set period of time. If the policyholder dies before the end of that period, the remaining funds will be paid to the designated beneficiary.

• Deferred annuities: In deferred annuities, the policyholder is allowed to accumulate the funds over time, and the death benefit is typically paid to the designated beneficiary in a lump sum or in payments.

• Single Premium Immediate Annuities (SPIA): The death benefit in these types of annuities are based on the purchase amount and the guaranteed interest rate, the balance of the purchase amount will be paid to the beneficiaries if the policyholder dies before the income payments have begun.

• Variable Annuities: A variable annuity is an investment product and the death benefit depends on the underlying investment performance.

It is important to review the specific terms of your annuity policy to understand what happens to the funds when the owner passes away. Additionally, you can also ask your annuity provider for more information about death benefits and how to name a beneficiary on the policy.

Annuities are typically purchased with a lump sum of money, and the funds used to purchase an annuity can come from various sources. Some common types of funds that are used to purchase an annuity include:

Savings: Many people use money from their savings accounts to purchase an annuity.

Investment portfolio: Some investors use money from their investment portfolios, such as stocks, bonds or mutual funds to purchase an annuity.

Retirement accounts: Some people use money from their retirement accounts, such as 401(k) or IRA, to purchase an annuity.

Inheritances: Some individuals use the money they have inherited to purchase an annuity.

Sale of assets: Some people may use the proceeds from the sale of a home, business, or other assets to purchase an annuity.

It is important to note that when using funds from a retirement account, such as an IRA or 401(k), to purchase an annuity, you may be subject to taxes and penalties if you are not of retirement age. Additionally, it's always important to check the suitability of the annuity for your own financial situation and goals. It's always advisable to consult with a financial professional before making any investment decisions.

A fixed annuity is an annuity that receives a set percentage each year from the insurance company. It does not mirror any index.

A fixed indexed annuity is an annuity where the gains of the index like the S&P 500 are mirrored by your annuity. Many annuities don’t have any caps on the gains that can be received in indexing options. Index annuities do not lose money when the stock market declines.

Thank you for your interest in our annuity products. We understand that each individual's financial situation is unique, and we're here to help you find the right annuity solution that fits your specific needs.

We offer a wide range of annuity options that can be tailored to your personal goals and objectives. Our team of financial advisors has the expertise and experience to help you understand the different types of annuities and their features and can work with you to design a customized plan that fits your specific financial situation.

To get started, we recommend setting up a consultation with one of our financial advisors. During the consultation, you'll have the opportunity to discuss your financial goals and objectives, as well as any questions or concerns you may have about annuities. Based on the information you provide, our advisor will be able to provide personalized information and recommendations that fit your unique financial situation.

Please feel free to contact us at your convenience and we will be happy to schedule a consultation with one of our advisors. We look forward to helping you achieve your financial goals with a personalized annuity plan.