Here’s how Gus ADDS numbers TOGETHER so that you will have MORE:

He begins with an annuity that credits a guaranteed 2% every year. When the index he chose to allocate his premium to performs with a 4% gain, Gus multiplies that by 150% to arrive at 6%. Then, he adds the 2% guarantee, plus the 6%, to equal 8% credited interest for the year. Gus, being a generous chap, promises that however the index performs in the succeeding year – whether it credits 10% or nothing at all – that he will still deliver with a 2% guarantee and preserve all of the gains made in previous years.

The Many Pluses of Annuities

The first major feature of a fixed or indexed annuity is protecting the principle from market downturns. The value of your account won’t lose value if the market declines.

Interest rates on fixed rate annuities are fixed and don’t have growth potential but the interest is higher than other fixed products, like CDs. Indexed annuities are subject to caps, participation rates or a margin which can impose limits on gains. However, the benefit of these rate strategies far outweighs the detriments, as one can participate in market gains, but not be subject to a market spiraling downwards. Annuities will provide growth without the heart-wrenching experience of a plunging market, which is a major benefit: PIECE OF MIND.

Many annuities also provide for inflation protection and/or a death benefit multiplier that can enhance a legacy plan. An annuity with an income rider can produce a guaranteed income stream that will last as long as you live, no matter what happens to the markets or the economy. As employer pensions rapidly disappear from many retirement plans, an annuity can fill the void. When you no longer earn a paycheck, an annuity that produces monthly income is a lifesaver and something you can count on. Similar to Social Security, you can begin taking income at a specific age for a specific amount, creating your personal pension plan.

Annuities Are Part of a Well-Rounded Plan

As most people get closer to retirement, they begin to consider preserving what they’ve saved. Choosing the right products that provide the benefits you require is a key part of building a balanced plan and the income you’ll need in your future years. Annuities offer strong income guarantees that you cannot outlive.

If you’re relying on your investments for income in the years just before you retire, or early in your retirement, a severe market downturn – like we’re experiencing now – is devastating. Retirees who need to sell their equities to pay the bills are stuck making withdrawals from a depreciated portfolio.

Because of its reliability, an annuity can actually help protect the other investments in your portfolio. It allows you to ride out a stock market meltdown so you can recover lost value when it rebounds. You won’t feel as though you have to sell those holdings for income when the market is in a free fall. It adds another level of diversification that protects the entire plan.

Adding an Annuity to Your Portfolio

How much should you put into an annuity for retirement planning? Each individual should assess their future income needs, in addition to other income sources, like Social Security and a pension. Most importantly, if income is a desired objective, a fixed-index annuity is a necessity for building a dependable and steady paycheck in retirement. It’s a do-it-yourself pension. For those planning a comprehensive retirement, a portion of their portfolio should be structured with annuities that feature a guaranteed monthly paycheck to cover basic living expenses, in addition to supplementing liquidity and long-term growth.

You may think that annuities are complex, but compared to understanding a prospectus or the risk of a tumultuous market, they are relatively straightforward and a safe alternative for those who want to eliminate a tragic outcome. Many people think annuities make a lot of sense, guaranteeing their income needs and adding stability in uncertain times.

An annuity is a powerful planning tool that can calm your concerns about an unpredictable future.

Bill Moeller is president and founder of Clarity Financial Insurance. Over the last 40 years, Bill has counseled and worked with hundreds of people planning for and growing their retirement. His practice of helping more people grew out of those consultations and the realization that people need help navigating their course to and through retirement.

P.S. Anyone can recommend accumulation of a stock and bond portfolio. But it’s entirely different to build a comprehensive, safe and secure plan that creates and distributes a steady stream of guaranteed income for years to come!

CLARITY FINANCIAL INSURANCE

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949-235-4299