An annuity allows you to grow your investment in a tax-deferred environment. It allows you to invest any amount you want, will help you to avoid probate, and more importantly, cannot be touched by any creditors.
Annuities can be the perfect investment vehicles for IRA’s, and other plans that meet specific qualifications.
It’s important to note that fixed and immediate annuities have NO FEES, and many indexed ones also have no fees. If you die, your heirs receive funds from fixed, variable and indexed annuities.
In simple terms, an annuity is simply a contract between an insurance company and yourself. Usually there are four that you will use. They are; variable, fixed, immediate, and indexed annuities. They can be purchased with a lump sum, or through numerous payments over your lifetime. Once retired, they’ll provide regular, periodic payments to you, in the time frame you designate.
This provides you with income for your retirement years and is dependent on your financial goals, the value of your portfolio and your individual tax situation. This is why it’s important to have a financial planner help guide you through the process, in order to assure that you have a financially comfortable retirement.
There are over one million people licensed to sell annuities nationwide. Unfortunately, most of these well-intentioned people are ill-prepared and poorly trained to sell a product that can be a powerful retirement income planning tool. I once did a training seminar for about one hundred agents in Atlanta, Georgia. I asked how many of the agents represented a well-known company and about ninety percent raised their hands. I then offered $100 to the first agent who could explain how that company’s most popular product worked – one with a two-tier strategy (explained later in the book) – to the rest of the group. Not a single agent came forward. So when several class action suits were filed against that company, I wasn’t surprised.
I remember another time an agent I know contacted one of my clients, who then called me concerned. The agent had told the client how he would do things differently – and worried the client – yet this agent had never even sold as many annuities in his life as the client owned. Yes, even in our field, beyond the well-intentioned, there are morons. I want to help you understand annuities and life insurance so that you will be educated and make the right choices if you choose to use these powerful tools.