An annuity is a series of payments made at equal intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments. Find out more at https://abichfinancial.com/services/:
Oh, the word ‘annuity.’ It’s become the ‘A’ word in retirement. We love talking about annuities because there’s so much misinformation out there about annuities, and quite frankly there’s a lot of really good ones and there’s a lot of really bad ones. Specifically, fixed indexed annuities, which we do use in our clients’ portfolios and plans from time to time.
There are 500 of them on the market offered by over 50 different companies. So how would you even know which one is right for you? There are also four different kinds of annuities immediate annuities, which are like pensions, deferred fixed annuities, variable annuities, and fixed indexed annuities. And oftentimes professional financial professionals out there lump all annuities into one pile in one category and that’s not fair or right.
A lot of our clients sometimes who have an annuity don’t even know which kind they have or how it’s really working for them. So that’s something that Abe really helps to clarify, and we specifically focus on fixed indexed annuities. Some of the other annuities as Abe will explain to people usually are not advantageous for a retiree and or may have been great 15 to 20 years ago, but just like cars change and technology change, there are many great new products out there including fixed indexed annuities. And certain types of them are much more beneficial and up-to-date for our clients.
Nothing’s perfect. Neither are annuities. Far from perfect. There are pro’s and con’s with them and every other investment and financial product that you own and have. But again, what an annuity is is an insurance contract offered by an insurance company that’s designed to give a retiree income that they can live on for the rest of their lives. Annuities can be used for income. They can be used for growth potential. They can be used for a combination. They can be used for passing money on to your loved ones.
What I always explain to people is, an annuity is a really great middle-ground solution because you have two options. Traditionally, you have the bank, which is super safe and so really saves clients. They may have too much in the bank and it’s not doing anything for them or they have everything or most of their retirement plan at risk in the market. So, a fixed index annuity, a good one, is a really great in-between plan where it’s like, “We want to still be safe with some of our money, but we want to make sure that we don’t lose it if something happens.” And there are a few downsides to it, but the upsides for all of our clients pretty much far outweigh the downsides if your philosophy drives with ours and that is, airing on the safe and conservative side where possible.
We’d be happy to give you an annuity X-ray if you currently own an annuity. An annuity x-ray or just a general information session about the different kinds of annuities and how and why they might be beneficial for you.