{"id":250,"date":"2016-04-28T15:43:23","date_gmt":"2016-04-28T15:43:23","guid":{"rendered":"http:\/\/www.himmelsteinfinancial.com\/?page_id=250"},"modified":"2017-04-25T18:48:45","modified_gmt":"2017-04-25T18:48:45","slug":"annuities","status":"publish","type":"page","link":"https:\/\/staging.himmelsteinfinancial.com\/index.php\/annuities\/","title":{"rendered":"Annuities"},"content":{"rendered":"

\"annuities\"<\/p>\n

Why Do People Buy Annuities?<\/h1>\n
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Annuities are insurance-based financial vehicles that\u00a0can provide\u00a0many benefits sought\u00a0by\u00a0retirement-minded investors. There are a number of reasons why people buy annuities.<\/p>\n

Deferral of taxes is a big benefit, and so is the ability to put large sums of money into an annuity \u2014 more than is allowed annually in a 401(k) plan or an IRA \u2014 all at once or over a period of time. Annuities offer flexible payout options that can help retirees meet their cash-flow needs. They also offer a death benefit; generally, if the contract owner or annuitant dies before the annuitization stage, the beneficiary will receive a death benefit at least equal to the net premiums paid. Annuities can help an estate avoid probate; beneficiaries receive the annuity proceeds without time delays and probate expenses. One of the most appealing benefits of an annuity is the option for a guaranteed lifetime income stream.<\/p>\n

When you purchase an annuity contract, your annuity assets will accumulate tax deferred until you start taking withdrawals in retirement. Distributions of earnings are taxed as ordinary income. Withdrawals taken prior to age\u00a059\u00bd may be subject to a\u00a010% federal income tax penalty.<\/p>\n

Fixed annuities pay a fixed rate of return that can start right away (with an immediate fixed annuity) or can be postponed to a future date (with a deferred fixed annuity). Although the rate on a fixed annuity may be adjusted, it will never fall below a guaranteed minimum rate specified in the annuity contract. This guaranteed rate acts as a \u201cfloor\u201d to help protect owners from periods of low interest rates. Any guarantees are contingent on the financial strength and claims-paying ability of the issuing insurance company.<\/p>\n

Variable annuities offer fluctuating returns. The owner of a variable annuity allocates premiums among his or her choice of investment subaccounts, which can range from low risk to very high risk. The return on a variable annuity is based on the performance of the subaccounts that are selected. Any guarantees are contingent on the financial strength and claims-paying ability of the issuing insurance company. The investment return and principal value of an investment option are not guaranteed. Variable annuity subaccounts fluctuate with changes in market conditions. When a variable annuity is surrendered, the principal may be worth more or less than the original amount invested.<\/p>\n

Variable annuities are long-term investment vehicles designed for retirement purposes. They are sold\u00a0by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.<\/em><\/p>\n

Of course, there are contract limitations, fees, and charges associated with annuities, which can include mortality and expense risk charges, sales and surrender charges, investment management fees, administrative fees, and charges for optional benefits. Surrender charges may apply during the contract\u2019s early years in the event that the contract owner surrenders the annuity. Variable annuities are not guaranteed by the FDIC or any other government agency; nor are they guaranteed or endorsed by any bank or savings association.<\/p>\n

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Stumped ? Call Paul !<\/h3>\n

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. \u00a9 2016 Emerald Connect, LLC<\/em><\/p>\n