For most Americans, gone are the days of the reliable company pension for retirement. Today’s retirees are faced with saving up money in tax-deferred accounts like 401(k)s, then after they retire, being left to figure out how to withdraw money correctly so they don’t run out of money in retirement. Not to mention having to navigate complex income tax issues as they make required annual withdrawals starting at age 72!
Meanwhile, retirees face record inflation, threats to Social Security solvency and Medicare premium increases.
With longer life expectancies than any generation that ever lived before, annuities can provide a way to create lifetime income that doesn’t run out, along with principal-protection* and potential growth based on capital market performance. There are even annuities that can help address inflation.
Annuities Are Not All the Same
A fixed indexed annuity should not be confused with a variable annuity. Variable annuities are securities actually invested in the market, sold by prospectus, and subject to market risk. Most variable annuities have high fees built in. As a result, a variable annuity’s monthly annuitized payout once you take it may be lower than you expect.
Fixed indexed annuities (FIAs) on the other hand are subject to the crediting spelled out by the contract, with principal protection when held to term.
An FIA is not an investment, it’s an insurance product. A fixed indexed annuity has a crediting mechanism based on a stock market index, but it is not actually invested in the market. An FIA is a contractually guaranteed transfer-of-risk strategy and a non-correlated portfolio asset. Your principal and earnings are guaranteed* to never lose value as long as the insurance carrier is able to pay claims.
At Alpha Beta Gamma Risk Management, we do the research and typically recommend uncapped FIAs with the lowest fees and highest policy crediting ratios from carriers with the highest historic payouts. Uncapped fixed indexed annuities are a critical component of Alpha Beta Gamma Wealth Management’s proprietary formula, The Gamma Formula™.
Learn more by watching this video:
Call Alpha Beta Gamma Risk Management at (866) 837-0999 for a no-obligation conversation about annuities and how your retirement portfolio might benefit from them.
*Guarantees and protections of fixed indexed annuities are subject to the claims-paying ability of the issuing insurance company. Fixed indexed annuities are contracts purchased from a life insurance company. They are designed for long-term retirement goals, and also intended for someone with sufficient cash and liquid assets for living expenses and unexpected financial emergencies, including, for example, medical expenses. Depending on the product, fixed indexed annuities may include surrender charges, rider charges and other fees.
A fixed indexed annuity is not a registered security or stock market investment. As such, it does not directly participate in any stock, equity or bond investments, or index. Gains on indexed accounts are based on participation rates and other conditions offered by the issuing insurance company. If purchased with tax-deferred money, withdrawals are subject to income tax, and as with all pre-tax qualified retirement money, withdrawals before age 59½ may be subject to taxes plus a 10% early withdrawal federal tax penalty.
This website is for informational purposes only and is not intended to provide any recommendations or tax or legal advice.