Florida residents - If you are shopping for an annuity please call 561-741-8849. As a broker I will shop for the best annuity rates, best annuity companies and the best annuity choices for you and your family.

Why would I want an Annuity?
Think of an annuity as a CD (certificate of deposit) only instead of it being issued by a bank it is issued by an insurance company. The advantage an annuity has over CD's is the fact that they grow tax free until you start withdrawing money.

What about safety?
Annuities issued by reputable insurnace companies are very safe. Much the same as CD's issued by reputable banks.

What is a SPIA?
A SPIA is a single premium immediate annuity. This is great if you have a sum of money to invest and want to make certain you do not out live your money.
For example, lets assume your mother lives alone and has $250,000 savings. She is 65 years old and you want to make certain she is taken care of however you are afraid that someone may try to cheat her out of her money. The solution, you buy an immediate annuity that would pay your monther a set amount for the rest of her life. Even if she lives to be 95 years old, she would still contiue to get paid every month. You can't outlive the money and it is very safe.

My friend bought an annuity and was given a 10% bonus. What is that?
Some equity indexed annuities offer the customers a 5% or 10% bonus when they purchase the annuity. This varies by company so please call me to see which annuity is best for you.

Which company is best for me?
It depends on a lot of factors. The rates vary so it is always best to call me, tell me more about your investment goals and we will research the best company to go with.
Becasue I am a broker I have the ability to search dozens of companies to find the best deal for my cleints. Captive agents are usually stuck with just one company. Let me shop around for the best rates for you.

Read Excerpts from USA Today and Kiplinger's

Managing Your Money

Excerpts from USA Today

An annuity could protect your savings

By Sandra Block, USA TODAY

There's a good chance you will live for many years after you retire. The average 65-year-old will live an additional 17.8 years. A healthy percentage of retirees will live much longer.

But as Americans are living longer, many worry they'll outlive their money. Events of the recent years have stoked those fears. Many retirees have seen their stock investments savaged by the bear market. Those seeking sanctuary in money market funds and certificates of deposit have seen their income evaporate.

The financial services industry has a solution: it's called an immediate income annuity. These products offer a way to ensure you'll receive a check every month for as long as you live. Immediate annuities provide a way to create your own pension, using the money you've saved for retirement.

When you buy an immediate annuity, you give an insurance company your money in exchange for a guarantee that you'll receive a monthly check for the rest of your life or for a specific period of time. The amount of the payment you receive will depend on several factors, including your life expectancy and the age of your spouse if you include a spouse in your coverage.

What you should consider before you buy an immediate annuity:

Control of your money. Even the biggest supporters of immediate annuities say you should only use them for a portion of your retirement savings. The reason: Once you hand over your money, you're locked into the agreed upon monthly payment. If you underestimate your expenses or need money to buy a new car or for an emergency, you cannot get money from your annuity. An immediate annuity cannot be cashed in.. It is an irrevocable one-time purchase.

Your heirs. If you buy an immediate annuity that just provides payments for the rest of your life, the payments will stop when you die. There will be no residual payment to your heirs, even if you die shortly after buying the annuity. However, there are ways to remedy this problem: You can set up the annuity so that it may outlast your lifetime. How? If you're married, you can buy a joint and last survivor annuity, which continues payments as long as you or your spouse is alive. If you're single and have beneficiaries, you can add a clause to your annuity that guarantees payments for a specific period, ranging from 10 to 30 years, if you died before the end of that period. In this case, your beneficiaries will continue to receive payments until the period expires. Of course, the longer the term you add to your annuity the less you receive in monthly payments. Nonetheless, this cost may be worth it since the income will continue to be paid to your heirs after you died.

Inflation. Most fixed immediate annuities provide a level payment for the rest of your lifetime. Some companies offer a fixed level Cost of Living rider which you can elect at the time you purchase your annuity. This sets up an annual percent increase to the amount of your income. In return for a larger paycheck in your later years, you will give up some income in the earlier years.

Fees. When you buy a fixed immediate annuity, you pay no loads nor management fees. That's surprisingly true for most fixed-type annuities. (If you buy a "variable" annuity, however, you will pay what's known as a "mortality and expense" fee plus an investment management fee.) There are no sales fees or back-end charges when you buy a fixed immediate annuity.

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The security of an old-fashioned annuity can make for smooth sailing

Excerpts from Kiplinger's Personal Finance

Steady Flow of Income

By Mary Beth Franklin, KIPLINGER'S

An old idea is gaining ground in the new economy: Guaranteeing a steady stream of income in retirement that you can't outlive. That was the concept behind traditional pension plans. But 21st-century retirees will be looking for ways to turn years of accumulated savings in 401(k) plans and IRAs into reliable streams of income without suffering stock-market upsets.

That's why a growing number of retirees are looking at single-premium immediate annuities as a way of creating predictable income. "It's a do-it-yourself pension for a do-it-yourself world," says one retiree.

When you buy an immediate annuity from an insurance company, you exchange a lump sum of cash for the assurance that you will receive monthly checks for the rest of your life (or, for a specified period of time). The size of your checks is based on your age and sometimes gender (women get less because they tend to live longer) and how much you invest. How much you get each month also depends on whether you buy an annuity with payouts that cover your lifetime only, your lifetime but with a guaranteed minimum term (so all is not lost if you die prematurely), or your life and that of your spouse.

From heresy to gospel

Most financial writers used to think that turning over a chunk of a client's nest egg to an insurance company in exchange for level guaranteed payments was sheer heresy -- particularly when stocks were routinely producing double-digit returns.

But recent findings show that a retirement portfolio divided between an immediate annuity and a managed stock account could supercharge retirement security, providing both more guaranteed income and larger payouts than from a fully managed portfolio. It makes sense to hedge your bets by using part of your cash for an immediate annuity to establish a guaranteed stream of income while leaving the rest of your money invested for growth.

The assets invested for growth can help protect against inflation. A retiree can always buy an additional annuity later in life to increase monthly income and get a bigger bang for his buck because the payouts increase with your purchase age. While you're still counting on growth, by diverting part of your cash to an annuity you reduce the stakes if the market slumps.

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Annuities
The material presented on this web site may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advice, you may wish to consult a competent attorney, tax advisor, or accountant.

Note: Any reference to the word guarantee is based on the claims paying ability of the underlying insurance company.

An annuity is a contract issued by an insurance company. It is a unique financial product that provides tax deferral of interest and capital gains and the option (if funds are annuitized) of a guaranteed monthly income for life. Although annuities can serve various needs, the primary purpose of an annuity is that of a retirement vehicle for the annuitant, the person who will usually receive the annuity benefits. The annuity is an attractive retirement vehicle because the money accumulating in an annuity, grows on a tax deferred basis. There are two parts to an annuity: the accumulation phase and the distribution phase.

After accumulating money in an annuity it is not mandatory that the annuitant exercise the annuitization option and relinquish control of his or her cash value and enter into the annuity distribution phase, the annuitant can simply cash out of his or her annuity.

The Accumulation Phase:

Features:
During the accumulation phase, the fund grows tax deferred, it does not grow tax free. If the annuity was not purchased as part of a qualified retirement program such as an IRA, 401(k), TSA, or 457 plan, income taxes are paid on the earnings when money is ultimately paid out. If the annuity is part of a qualified plan the entire fund is subject to income taxes as it is withdrawn.

Surrender charges for early withdrawals. Most offer partial withdrawals free of surrender charges.

If you withdraw money from your annuity before age 59 ½ it is called a “premature distribution” and is subject to an additional 10% IRS penalty.

If a premature death should occur, the accumulated funds within the annuity are transferred to the named beneficiary, avoiding probate costs.

Annuities can vary by payment mode and are available as “single premium” (purchased with one-time payment) or “flexible premium” (purchased with recurring periodic payments). They also vary by timing of the annuity income and may be available as a “deferred annuity” (which means that annuity income payments are deferred until later) or as an “immediate annuity” (which means that annuity income starts immediately).

For fixed and equity indexed annuities there is safety of principal and earnings.

Variable products are subject to mortality and expense charges and administrative fees not typically found with other investments.

Types:
1) Fixed annuities
2) Equity Indexed annuities

Fixed Annuities:
In a fixed annuity, the insurance carrier:

Declares a current rate of interest for a specified time period. Once the time expires the company will set a new rate which may be higher or lower than the original rate.

Guarantees a minimum interest rate of return which is specified in the contract, and at no time may the current or renewal interest rate fall below it.

Guarantees the principal.

* Equity Indexed Annuities:
An Equity-Indexed Annuity (EIA) has interest rates that are linked to growth in the equity market as measured by an index such as the S&P 500. The EIA owner enjoys the upside potential of equities but is not exposed to downside risk. Subject to fixed minimum guarantees, the value of an EIA can only increase due to market growth – it will never decline due to market movement. There are many variations in product design. No two of the EIAs are exactly alike, and some are very different from each other. However, all the various types fall into three general categories: annual high-water mark with look-back. The following is a simple definition of each. Please call us if you would like to know more.

Annual Reset – Also known as the annual ratchet design, the annual reset design resets the starting index point annually. It also credits index increases (interest) annually and compounds annually.

Point-to-Point – The point-to-point design measures the change in the index from the start of the term to the end of the term.

Annual High-Water Mark with Look-Back – The annual high-water mark with look-back can be viewed as a variation on the point-to-point design, except that it measures the index from the start of the term to the highest anniversary value over the term.

* Some annuities allow the insurance company to change participation rates, cap rates or spread/asset/margin fees either annual or at the start of the next contract term. If an insurance company subsequently lowers the participation rate or cap rate or increases the fees, this could adversely affect an investor's return. Therefore, a prospective investor must carefully review his or her contract in order to examine these issues.

Withdrawal:
Withdrawals may be made at any time. However, the withdrawal may be subject surrender charges and if done before age 59 ½ there will be a 10% IRS penalty. Some contracts allow an annual 10% withdrawal free of surrender charges.

The owner may pre-authorize a systematic periodic withdrawal plan. The owner of the contract instructs the company to withdraw a percentage or a level dollar amount from the contract on a monthly, quarterly, semiannual, or annual basis.

The Distribution Phase

As part of the distribution phase, the owner has two options, he or she can withdraw money (either in a lump sum or elect a systematic withdrawal plan) or annuitize (purchase an annuity pay out plan).

Annuitization
When the owner annuitizes the funds he or she purchases an annuity pay out plan. In a Fixed and in an Equity Indexed Annuity the owner purchases a monthly income that will be paid to him or her until death. It is a guaranteed income that will not change. In a variable annuity, the owner has an option to do the same or transfer all or part of the contract to one or more of the sub-accounts that are available, and annuitize those funds. The funds that are annuitized in the separate accounts produce an income that will change from month to month based on the performance of the sub-account that the funds are placed in.

Annuity Pay Out Plans:
Life Only - Periodic monthly payments to an annuitant for the duration of his or her lifetime and then ceases. It is for a lifetime, the annuitant cannot outlive the payments. The payments are determined at the time of purchase and are based on age and sex.

Life with 10 years certain – Payments will be made for at least ten years, regardless if the annuitant lives for the entire ten years. If the annuitant dies during the ten-year period the remainder of the ten-year payments will be made to a beneficiary. If the annuitant lives longer than ten years he or she will continue to receive payments for his or her lifetime. The guaranteed monthly payments will be less than “life only.”

Life with 20 years certain – Payments will be made for at least twenty years, regardless if the annuitant lives for the entire twenty years. If the annuitant dies during the twenty-year period the remainder of the twenty-year payments will be made to a beneficiary. If the annuitant lives longer than twenty years he or she will continue to receive payments for his or her lifetime. The guaranteed monthly payments will be less than “life only”, and “Life with 10 years certain.”

Want to learn more about Index Annuities?
http://www.indexannuity.org

This web site may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advice. You may wish to consult a competent attorney, tax advisor, or accountant.

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