ANNUITIES
WORK WITH A QUALIFIED ANNUITIES MANAGER IN THE SCOTTSDALE, AZ AREA
An annuity is a contract between you and an insurance company. You either make a lump sum payment or a series of payments and in return, you receive regular payments starting now or at a specified date in the future. Many retirees are using annuities as a means to provide dependable monthly income for themselves, since Social Security isn’t enough. If you are concerned about running out of money in retirement and want a reliable stream of income to address this, an annuity may meet your needs. There are many types of annuities with different features and terms, so you should consult with a professional annuity service such as Mosaic Wealth Solutions in Scottsdale, AZ. A professional annuities manager can help you decide if an annuity aligns with your goals and if so, which type you should purchase.
ANNUITIES CAN CREATE A GUARANTEED STREAM OF INCOME TO SUPPLEMENT SOCIAL SECURITY IN RETIREMENT
Different types of annuities are appropriate for different situations and retirement goals. Fixed annuities offer a guaranteed interest rate and can be turned into a guaranteed income stream, if desired, in the future. Variable annuities offer no guaranteed rate of return but rather are tied to investments known as sub-accounts. The sub-accounts are invested in stocks and bonds, thus the growth or loss experienced is tied directly to the market. The contract value may turned into guaranteed income in the future. Indexed annuities are somewhat in the middle. The premiums pay can be placed in a fixed account which is very similar to a Fixed Annuity or it can be placed in an indexed account, The insurance company credits interest to the contract value based in part on the movement of an index. The interest may be subject to caps and or participation rates. It is important to note that these are not direct investments in the market nor are they investments. If the index has a negative return the index account will be credited with zero interest but will not experience the loss of the underlying index.
FIXED ANNUITY DISCLOSURE
Fixed Annuities are insurance products and are designed for long-term retirement income. Annuity guarantees are subject to the claims-paying ability of the insurance company. Surrender charges may apply if money is withdrawn before the end of the surrender period. All withdrawals of tax-deferred earnings are subject to current income tax, and, if made prior to age 59½, may also be subject to a 10% federal income tax penalty. Annuities generally contain fees and charges which include, but are not limited to, sales and surrender charges. Additionally, if purchased within a qualified plan, an annuity will provide no further tax deferral features. The contract, when redeemed, may be worth more or less than the amount used to purchase the annuity. Fixed annuities are contracts and you should read and understand the contract before making a purchasing decision.
ADDITIONAL FIA DISCLOSURES
A fixed indexed annuity credits interest to your contract based on the changes in an underlying index, such as the S&P 500® Composite Stock Price Index. Indexed annuity contracts also offer a specified minimum which the contract value will not fall below, regardless of index performance. A fixed indexed annuity isn’t a stock market investment, nor does it directly participate in any stock or equity investment. Some indexes do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; an index or any market-indexed annuity is not comparable to a direct investment in the financial markets. Clients who purchase indexed annuities are not directly investing in a stock market index. An index cannot be invested in directly and is unmanaged. Past index performance is not a representation of future performance. It is important to note that Fixed Index Annuities may be subject to a cap rate (a maximum interest crediting rate that may fall below that of the percentage movement of the applicable index), or a participation rate (a maximum percentage of interest credited based on the movement of the applicable index, eg. 50% participate means interested credited will be roughly half of the percentage change of the index) or both. Additionally, the contract may be subject to interest rate spreads. All Guarantees are subject to the claims paying ability of the issuing insurance company.
VARIABLE ANNUITIES
A variable annuity is a long-term, tax-deferred investment designed for retirement. It will fluctuate in value. It allows you to create a fixed or variable stream of income through a process called annuitization. It provides either variable rate of return based on the performance of the underlying investments of a fixed payment that is guaranteed for a defined period of time which can be as long as the rest of your life. Keep in mind that both options do have limitations and risks. Fixed payouts can be eroded over time by inflation. Variable payouts are subject to market risks and may not provide as consistent payments as fixed annuitization. Additionally, once annuitized the payment will stop when the duration of the payout period ends. This means that there may be no residual amounts available to heirs depending on the duration selected. A variable annuity isn’t intended to replace emergency funds or to fund short-term savings goal. Earnings are taxed as ordinary income when withdrawn. There may be a 10% federal tax penalty on withdrawals before age 59½. Naturally, your death benefit and the cash value of the annuity contract will be reduced if you take any early withdrawals. An annuity is a contract between you and an insurance company, and it’s sold by prospectus. You should read these documents. They describe risk factors, fees and charges that may apply to you. Variable annuities have fees and charges that include mortality and expense, administrative fees, contract fees and the expense of the underlying investment options. Variable Annuities are sold by prospectus. Both the product prospectus and underlying fund prospectuses can be obtained from the issuing insurance company or your financial advisor. Before investing, you should read the prospectus carefully and consider investment objectives, risks, charges and expenses. The product prospectus and underlying fund prospectus contain this and other important information. All Guarantees are subject to the claims paying ability of the issuing insurance company. These guarantees do not apply to the underlying investment options or their performance. Keep in mind that investing involves market risk and your investment return, principal value and periodic payments will fluctuate over time. You could end up with more or less than the amount you invested. Investing always involves risk, including the potential loss principal.
CONSULT WITH OUR ANNUITY SERVICE TODAY
If you think an annuity may align with your personal financial goals, consult with a professional at Mosaic Wealth Solutions to discuss the idea with an experienced professional. We offer free virtual consultations!