208.392.3374401(k) Plan A defined contribution plan that permits employees to have a portion of their salary deducted from their paycheck and contributed to an account. Federal (and sometimes state) taxes on the employee contributions and investment earnings are deferred until the participant receives a distribution from the plan (typically at retirement). Employers may also make [...]
Archive for the ‘FAQ’ Category
Q. What is an Annuity?
A. An annuity is a contract from an insurance company that individuals generally use to accumulate money for their retirement on a tax-deferred basis and that guarantees a fixed or variable payment to the annuitant at some future time. The guarantee associated with annuities are based on the claims paying ability of the issuer. This [...]
Q. Is an Annuity Safe?
A. This is primarily dependent on the insurance company that issued the annuity. As long as the company is solvent then the annuity is safe. In additional to the company guarantee, the annuity is protected by a legal reserve of assets that are required to be held by insurers to pay policy holders. One last [...]
Q. How important is a Guarantee?
A. Annuity guarantees are based on the ability of the insurer to make payments. So few things in the investing world are guaranteed, so annuity guarantees are of the upmost importance to retirees and those looking to annuities to provide a steady stream of income. In order to safeguard the funds of annuity contract holders [...]
Q. Why Choose an Annuity?
A. In a world with so many risks and unknowns, and annuity can provide peace of mind and surety. While an annuity doesn’t have the return potential of traditional investments like stocks and real estate, they also don’t have the volatility and uncertainty. For investors concerned that they may outlive their wealth or face a [...]
Q. Who chooses and Annuity?
A. Retirees and pre-retirees are the most common purchasers of annuities. Annuities are typically purchased as part of a comprehensive retirement plan and used to supplement social security in providing income for the necessities of life. In short they are for the income that you need and the retirement money that you cannot afford to [...]
Q. What is the difference between Immediate and Deferred Annuities?
A. The difference between and immediate and deferred annuity is similar to what you might think. An immediate annuity your income payments start within 12 months of purchase. You choose whether you want payments for a specific number of years or for a lifetime. The insurance company calculates the amount of each payment based on [...]
Q. Is an Annuity an Investment?
A. Under strict definition an annuity would qualify as an investment. However, an annuity is also a product designed to provide benefits similar to traditional investments with tools and guarantees that are unique and specific to the needs of retirees. Annuities can provide tax deferral, avoidance of probate, a fixed return, and guaranteed income for [...]
Q. How do I determine the Return on my Annuity?
A. If you already own an annuity or if you want to verify a quote all you need is a financial calculator. Enter your original investment as the present value, you monthly check x 12 as the annual payment and the amount of time you estimate living as the term. Hit solve and you will [...]
Q. What do I own when I purchase an Annuity?
A. You own a contract that specifies what your payments will be, how long your benefits will last, and what additional riders or benefits are included with your annuity contract.
Q. Do Annuities provide Tax Advantages?
A. The best way to purchase an annuity is in a competitive selection process. You don’t want to be limited to purchasing your annuity from a single or even a handful of insurance companies. You want insurance companies competing for your business by providing the best possible rates and benefits selected to meet your individual [...]