If you are one of the many people who invest in a 401k, IRA, mutual fund, stocks and bonds, you may not have heard of the benefits and features of certain annuities and life insurance. Most savings and investment products have associated risks and fees. Falling markets and fees will eat up any potential future gains over time. You’re making someone else rich, but I’ll show you that you have to diversify and get some money off the table.
No downside risk:
To receive a high rate of return, you must be able to accept and manage risk. Risk is very expensive. It’s okay to risk money if you want to gamble on Las Vegas or Monte Carlo, but why risk money you plan to use for retirement or future savings?
With Fixed and Fixed Indexed Annuities, as well as Whole and Indexed Universal Life, there is no downside risk and no brokerage or management fees. More of your money will go where it’s needed rather than to a brokerage or finance company. That means more money for your retirement in your later years.
Annuities:
Annuities are the only instrument in the world that can guarantee you an income for life. You can choose from immediate, fixed, fixed indexed, and variable annuities. Variable annuities have risk and fees, but still give you choice and income for life.
Deferred annuities also offer you a purchaseable rider that will allow your income amount to increase 5% to 10% per year for each year you postpone taking a lifetime income stream. When you finally decided to take an income stream, the payout will be calculated based on a few factors:
Your age at retirement
The corresponding percentage based on your age.
The dollar amount calculated by your original deposit plus the accrued percentage for each year you deferred earning.
The longer you wait to defer and your age, the higher your monthly payment will be.
Life insurance:
In addition to variable life insurance, whole life and index universal life insurance policies grow risk-free and tax-free. When you decide to withdraw money from your insurance policy, you are not penalized for early withdrawal and your money will not be taxed as income because it is a policy loan.
Your cash value is not subject to IRS Rule 59 ½ and the earnings are yours to spend whenever and wherever you want. These policies also have the death benefit associated with term policies. You can kill two birds with one stone with these life insurance policies. Save for retirement and take care of your family in the event of your death.
Be sure to consult with a knowledgeable annuity and life insurance broker to see which product or products work best for you and your family. These programs are only for people who want Wealth Preservation.