Medicare Supplements in Troy, Michigan

Why Let Income Taxes Put a Drag on Your Retirement Savings?

Annuities offer a wide array of tax-deferred portfolios with the potential to increase your pool of retirement assets and to help provide for your loved ones.

  • Avoid probate for certain assets!
  • Earn more interest on your money!
  • Avoid market risk!
  • Receive tax advantages to legally reduce the amount paid to the IRS!
  • Guaranteed rate of return and Guaranteed return of principal!
  • Types of Annuities Offered

Fixed Annuities

A Fixed Annuity is a contract between you and the insurance company which pays a guaranteed current interest rate. The interest rate may be guaranteed for one or more years and earns compound interest. The interest earnings compound on a tax-deferred basis. Fixed deferred annuities are offered either on a single premium basis, i.e., you give the insurance company a lump sum premium payment, (typically $5,000 or more); or on a flexible premium basis, i.e., you pay a lower re-occurring premium payment on a monthly, quarterly, or annual basis. In addition to tax deferral, fixed deferred annuities offer safety for your premium. Fixed deferred annuities offer a current interest rate which may never be less than a lifetime minimum guarantee (typically 3%). The current interest rate is declared and guaranteed by the insurance company. Thus, your premium in a fixed deferred annuity is not subject to market risk associated with volatile financial markets. Fixed deferred annuities have penalties for early withdrawal called surrender charges or withdrawal charges. These charges typically decline over the length of the surrender charge period.

Fixed Indexed Annuity

Fixed Indexed annuities are one of the hottest insurance products going these days. Fixed Indexed annuities offer you a guaranteed minimum return in the stock market in exchange for a limit in maximum return. In short: You get less upside but much less downside. You will never lose your principal.

Why risk your hard earned money in the Wall Street rollercoaster?

Fixed Indexed Annuities, or FIA’s for short, offer consumers what could be described as the best of both worlds: a market-driven investment with potentially attractive returns, plus a guaranteed minimum return. Brokers and agents like FIAs for another quite practical reason: because FIA returns are tied to indexes of market activity and not to the performance of individual stocks or funds, they have not been considered an investment product subject to U.S. Securities and Exchange Commission oversight. Therefore, while variable annuity products must be registered with the SEC, must issue prospectuses and can only be sold by professionals with securities licenses, Fixed Indexed Annuities are not federally regulated and brokers don’t need a securities license to sell them.

Got questions? We want to help! Ask an insurance expert
from American Insurance Advisors. Call us at 248-895-0000

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