Tax-deferred annuities a good investment?
Posted in Fixed Annuities over 3 years ago, 7 replies
submitted by Yonatan in Brooklyn, NY
Hi Andrew.
The best vehicle I have seen work over time is the Fixed Indexed Universal Life with Max Funding for Tax Free Retirement planning. There are no Limits on contributions. The S&P 500 average indexed 30 year historical return has been 8%. You are allowed to barrow money at any age from the Death Benefit , Not the cash Value. This is very important when considering withdrawals. You also have built in Long Term Care Benefits if you have a need to for disability and can't work. There is also a guaranteed lifetime income rider built into the policy to give consistent income from the program. And on and on and On... I recommend you get the book Tax Free Retirement from Patrick Kelly. It is at any book store and read up. I look forward to your emails in the future.
Sincerely, John Urich.
The best vehicle I have seen work over time is the Fixed Indexed Universal Life with Max Funding for Tax Free Retirement planning. There are no Limits on contributions. The S&P 500 average indexed 30 year historical return has been 8%. You are allowed to barrow money at any age from the Death Benefit , Not the cash Value. This is very important when considering withdrawals. You also have built in Long Term Care Benefits if you have a need to for disability and can't work. There is also a guaranteed lifetime income rider built into the policy to give consistent income from the program. And on and on and On... I recommend you get the book Tax Free Retirement from Patrick Kelly. It is at any book store and read up. I look forward to your emails in the future.
Sincerely, John Urich.
submitted by John Urich in Spokane WA
@ January 30, 2011 - 12:07 AM
They are a good idea, watch out for fees. Check fidelity, vanguard, or schwab
I would strongly recommend a Flexible Premium Equity Indexed Annuity. These are pegged to a stock index such as the S&P500, NASDAQ 100, or even some international options. The growth is tax deferred (you use after tax dollars) and unlike 401k or IRA, you do not need to worry about minimum withdrawal requirements at age 70 1/2. (Penalties on the 401k and IRA are STIFF! Also, unlike the retirement plans, annuities (if properly set up) allow you to bypass the probate process.
Equity Indexed Annuities allow you to participate in the upside of the equities markets, but protect you from the one big problem of the equities markets...you cannot lose money in a down year, such as 2008. Instead of losing the 48% or whatever on the S&P, you would have stayed exactly where you left off the year earlier. For this, you sacrifice some on the upside. There are caps, spreads, and participation rates that you have to educate yourself on...as well as options such as point to point versus monthly average. Sounds difficult, but isn't that bad...any life agent can get you brochures that clarify these.
There are policy fees, but as both a Life Insurance broker and a Registered Securities Rep, I will tell you that all investment vehicles have these. Even the "no load" mutual funds have 12b-1 fees that run about .5% on the total value.
Annuities have surrender fees. They are not meant to be short term investments. Some companies will add a bonus to your 1st year investment, but understand their surrender period will be extended. At some point, the surrrender fees go away...as few as 6 years and as long as 12 years. Something to shop, I'd say.
Annuities are the ONLY place that you can place you rmoney that will GUARANTEE a LIFETIME MONTHLY BENEFIT. Annuities once had a bad name because the only option was one that allowed for monthly income, but when you died, there was no ability to pass the balance on...this has changed now and there are several annuitization options.
A good strategy will be to continue maxxing out on the 401k and IRA and then buy one of these annuities. When ou retire, withdraw the 401k and IRA before you get to the annuities. If you never use the annuities you have provided for a nice estate.
Equity Indexed Annuities allow you to participate in the upside of the equities markets, but protect you from the one big problem of the equities markets...you cannot lose money in a down year, such as 2008. Instead of losing the 48% or whatever on the S&P, you would have stayed exactly where you left off the year earlier. For this, you sacrifice some on the upside. There are caps, spreads, and participation rates that you have to educate yourself on...as well as options such as point to point versus monthly average. Sounds difficult, but isn't that bad...any life agent can get you brochures that clarify these.
There are policy fees, but as both a Life Insurance broker and a Registered Securities Rep, I will tell you that all investment vehicles have these. Even the "no load" mutual funds have 12b-1 fees that run about .5% on the total value.
Annuities have surrender fees. They are not meant to be short term investments. Some companies will add a bonus to your 1st year investment, but understand their surrender period will be extended. At some point, the surrrender fees go away...as few as 6 years and as long as 12 years. Something to shop, I'd say.
Annuities are the ONLY place that you can place you rmoney that will GUARANTEE a LIFETIME MONTHLY BENEFIT. Annuities once had a bad name because the only option was one that allowed for monthly income, but when you died, there was no ability to pass the balance on...this has changed now and there are several annuitization options.
A good strategy will be to continue maxxing out on the 401k and IRA and then buy one of these annuities. When ou retire, withdraw the 401k and IRA before you get to the annuities. If you never use the annuities you have provided for a nice estate.
I would reccomend permanent life insurance from northwestern mutual. Talk to one of their financial planners. They set up roth IRAs too
The best vehicle I have seen work over time is the Fixed Indexed Universal Life with Max Funding for Tax Free Retirement planning. There are no Limits on contributions. The S&P 500 average indexed 30 year historical return has been 8%. You are allowed to barrow money at any age from the Death Benefit , Not the cash Value. This is very important when considering withdrawals. You also have built in Long Term Care Benefits if you have a need to for disability and can't work. There is also a guaranteed lifetime income rider built into the policy to give consistent income from the program. And on and on and On... I recommend you get the book Tax Free Retirement from Patrick Kelly. It is at any book store and read up. I look forward to your emails in the future.
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