Discover the many opportuinites available to help secure your financial future through the use of insurance products
In the past, retirees could typically count on three sources of retirement income that divided roughly into thirds. The three sources of income have traditionally been government funded Social Security, employer-sponsored components, and individual savings. With this traditional scenario, both the government and employer-sponsored components of the plan were considered predictable—reliable income sources that may also be adjusted for inflation. Only one-third of the plan, individual savings, was the responsibility of the individual. Today, however, the majority of the burden for retirement income seems to have shifted to the individual. For this reason, you may want to consider a guaranteed* fixed income component to your retirement strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed*.
An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed* payout options. Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit. However, withdrawals can reduce the value of the death benefit and excess withdrawals above the restricted limit typically incur “surrender charges” within the first five to fifteen years of the contract. Withdrawals will reduce the contract value and the value of any protection benefits, and because they are designed as a long-term retirement income vehicle, annuity withdrawals made before age 59½ are subject to a 10% penalty fee and all withdrawals may be subject to income taxes.
* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Annuities are NOT FDIC insured.
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