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Immediate
Annuity
With
an Immediate Annuity, you pay a lump sum to an insurance
company in exchange for their promise to pay you a
certain amount of money for a specified amount of
time. The time period could be for the remainder of
your life. The advantage is that you are guaranteed
by the insurance company to receive this payment for
that chosen time period. This is a good vehicle for
someone whose primary concern is that they do not
run out of money. The disadvantage is, depending upon
which income option is selected, you may receive less
than your principal if you die early.
Deferred
Annuity
A
Deferred Annuity is used as an accumulation vehicle
and can be either fixed or variable. The major advantage
of using an annuity as an accumulation tool is that
no income tax is paid on the growth and/or income
until it is withdrawn. For many retirees this can
have the added advantage of decreasing taxes paid
on Social Security benefits.
Fixed
Annuity
In
a Fixed Annuity, your premium payment to the insurance
company is held in the insurance company's general
account. The insurance company will pay a current
interest rate on this amount and generally provides
for a minimum guaranteed interest rate. The current
interest rate on annuities is typically competitive
with other fixed rate investments. Because your money
is held in the general account of the insurance company,
it is important to choose a financially secure company.
Variable
Annuity
A Variable Annuity allows the investor/policyowner
to diversify into various sub-accounts while maintaining
the tax advantages of an annuity. These sub-accounts
usually include stock portfolios, bond portfolios
and international portfolios as well as fixed rate
and money market sub-accounts. This allows the investor
to allocate his or her assets within the annuity based
on personal goals, objectives, time horizon, etc.
Note:
Premature withdrawals may be subject to a 10% IRS
penalty. Variable annuities are not federally insured,
are not obligations of, nor are they guaranteed by
any financial institution or any affiliate, and involve
investment risks, which may include loss of principal.
Another advantage of a variable annuity is the money
is not held in the general account of the insurance
company but rather is segregated. This provides the
investor policyowner with added protection against
insurance company insolvency.
Depending
upon your situation, the tax deferral offered by an
annuity may be an attractive feature. However, it
should be noted that tax on gains in an annuity, either
income or growth, must eventually be paid - if not
by you then by your beneficiaries. A beneficiary spouse
may continue the tax deferral. It is important, when
evaluating utilizing an annuity, to consider how it
fits into your overall strategy based on your goals
and objectives.
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Glen
Ladau, President of The Matrix Financial Group, is
a graduate of the Wharton School of Finance, a Certified
Financial Planner, Certified Public Accountant and
Chartered Life Underwriter. As registered securities
representatives and licensed life and health insurance
agents, Glen and the team of professionals at The
Matrix Financial Group are dedicated to helping our
clients maximize their financial potential.
If
you would like to discuss whether annuities are an
appropriate financial tool to include in your portfolio,
call Glen Ladau at The Matrix Financial Group
The Matrix
Financial Group
7284 W
Palmetto Park Rd
Boca Raton, FL 33433
Suite
206
Boca Raton
(561) 394-3040
Broward (954) 797-0002
Palm Beach (561) 296-0740
Toll Free (888) 356-3900
www.matrixsouthflorida.com
glen@matrixsouthflorida.com
It
is important to keep in mind the financial situation
of each individual is unique and, therefore, your
investment decisions should not be based solely on
the concepts and information presented in this article.
Securities Offered Through ValMark Securities, Inc.
Member FINRA (http://www.FINRA.org), SIPC
Investment Advisory Services Offered Through ValMark
Advisers, Inc. a SEC Registered Investment Advisor
The Matrix Financial Group is a separate entity from
ValMark Securities, Inc. and ValMark Advisers, Inc. |
