Advantages of Annuities
Annuities are very unique products, that many investors utilize a their main retirement savings vehicle. Of course, as with any investment product, the advantages will change depending on the product you choose and your specific situation. In general, some of the major benefits that annuities can provide are:
Annuities are one of the only products available that maintain complete tax-deferred status. Any money you invest in an annuity grows tax-deferred until it is taken out. Unlike other products, there are no limits on contributions to your annuity, so any new money that you invest will grow tax deferred until you withdraw. In addition, there are no phase out schedules that apply to contract owners.
One feature that is unique to annuities is the guaranteed payout. When you annuitize, you can elect to receive lifetime payments, which will guarantee that you continue to receive payments from your annuity until you pass away, even if you have exhausted the funds in your annuity before that point.
No Losses During Market Downturns
If you’ve purchased a product like a fixed index annuity, your retirement savings under your annuity contract are protected from stock market losses. Since your money is tied to an index like the S&P 500, rather than invested in the market directly, should the stock market crash (ie. crash of 2008), your money is not at risk.
FAFSA Asset Exemption
Annuity owners with students or children destined for college can benefit from owning an annuity as annuity contracts do not have to claim their annuity as an asset. This can make a major difference when applying for loans or grants for your student.
Probate and Creditor Protection
In most cases, annuity contracts are exempt from being pursued by creditors and are 100% exempt from probate proceedings. Depending on your state, creditor exemptions may vary. In these circumstances it is best to consult your state’s insurance commissioner for further information.
Want to Learn More About Annuities?
Schedule your free, no obligation consultation today and let us explain the various types of annuities available and what will work best for your specific situation.