Retirement

Annuities Pay on the Way to Retirement

The challenges facing many baby boomers include having to pay for their children's education, while possibly caring for an aging parent. This can come as quite a shock to most people who, in addition to all that, have their own approaching retirement to worry about.

However, annuities can help ease the financial burden. Annuities are flexible insurance contracts designed to provide income and tax-deferred growth, while helping people achieve their long-term savings and retirement goals. There are many different types of annuities, but for our discussion here are the four major types:

Fixed annuities: These are contracts that pay out a fixed benefit for the life of the contract. The underlying investments are chosen by the insurance company.
Variable annuities: These contracts can pay a variable benefit amount based on an underlying index or on mutual fund results. The underlying investments are chosen by the annuity holder.
Immediate annuities: These typically pay an income to the named annuitant (the person who is entitled to receive benefits from an annuity) about one month after receipt of a large single premium.
Deferred annuities: These contracts are similar to immediate annuities, except the payment option is deferred until a later date or milestone is reached.

One of the key features of annuities is the flexibility they offer by allowing you to put money into these savings vehicles on a pretax or after-tax basis.

Also, annuity holders have a choice as to how they want to invest the money within the annuity as well as how they would like to be paid during the payout phase of annuity contract.

Annuities can be a good tool to help you reach your financial and retirement goals. They are offered by life and annuity insurance companies, and it is important to periodically check on the financial strength of those carriers.

EXAMPLE OF CD VS. ANNUITY

As CD’s come due it’s a good time to know how moving your money into an annuity can provide you a better return with more options for your money.

FEATURES	ANNUITY	CD

Tax Deferred Growth?	YES	NO
Free from market risk?	YES	YES
Penalty free withdrawals?	YES	NO
Flexible Premium?	YES	NO
Avoid expenses & probate delay?	YES	NO
Emergency Access to funds?	YES	NO

Tax-Deferred Accumulation

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L. V. Dever, President/CEO, DEVCO Insurance Service, has Financial Representatives that are primarily licensed in Texas.

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