Welcome to our Annuity Vault! Start with understanding the basics and then work up to hearing feedback from various professionals! Padlock Retirement wants to make things simple for you.
Quick Review: Basic Annuity Concepts
Annuities are a long-term investment, a lot of options containing a guaranteed income that can't be outlived. They also come crammed full of additional benefits such as variable growth potential, inflation protection and federal tax deferral for retirement purposes - making them an excellent choice for those who want reliable cash flow in their later years, without paying high taxes!
Index-driven annuities are becoming increasingly popular because they can provide you with a guaranteed upside potential on your money, without any risk of losing money from your principal.
An Indexed annuity works best when the underlying index performs well, but if it falls short of expectations there's no loss like in traditional variable rate products. By not participating in market losses, retirees can safely grow their money more than fixed or income annuities, but less than the market - due to the nature of it being a financial insurance product. It also has access to a fixed interest rate. 
Variable annuities allow holders to participate in market-linked appreciation potential, based on the return of underlying assets such as mutual funds.
Variable annuity account's are not invested directly into these investments, but rather they are placed in the insurance company’s sub-accounts. If the underlying investments perform well, a variable annuity can produce a nice return. Alternatively, if these accounts perform poorly, it can result in a loss. So, just like investing in stocks and mutual funds directly, there is higher risk and fees associated with owning a variable annuity. |
With a fixed annuity, you can earn guaranteed interest on your investments.
The rate of return is set by the insurance company and will never fall below this minimum, regardless what happens in economic or market conditions. This helps create safety and reliability for investors during volatile times. You'll also be able to take advantage of tax deferral using these products! 
With an immediate annuity, a single lump sum deposit is typically contributed to the annuity.
This contribution can come from personal savings, or alternatively, can be rolled over from retirement savings like a traditional IRA or a 401(k) plan. Income from an immediate annuity begins right away. These are only an option if you need to fill an income gap in retirement. |
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It's time to show you the next key to fully unlocking your financial potential, by visiting the Retirement Planning Vault. This section is chalk full of advanced concepts such as; Roth Conversion Strategies, Long Term Care, Tax-Free Income Planning, Upcoming Legislation, and Market Stress-Tests of what would happen during a "2008 crash".
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