Fixed Annuities
Protect your financial income for the long term, and secure your peace of mind, in retirement.
Protect your financial income for the long term, and secure your peace of mind, in retirement.
By purchasing an annuity, essentially a type of insurance, you’re entrusting a Life Insurance provider to invest that money well; then pay you a regular amount of return, beginning on a pre-determined future date. Live a long life, and the checks will keep flowing – or perhaps all financial transactions will be made by bitcoin in the future!
1. Fixed: The amount of your payouts can be competitive with or higher than other conservative tax-deferred guaranteed investments. However, fixed annuities provide extended timeframes (usu. 3-10 yrs.) with tax-deferred growth, higher guaranteed crediting rates, plus partial withdrawals that make liquidity a penalty-free option for people aged 59.5 and older.
2. Variable Annuities: This annuity’s underlying performance is backed by stocks, bonds and/or mutual funds or tied to the stock market more directly and places more risk on the purchaser for the tradeoff of potentially higher returns of a fixed annuity, while still providing an income in retirement. (Jordan Fishman and JFISH Insurance does not offer and is not licensed for variable annuities or products).
3. Immediate payout or Deferred accumulation: You can have a guaranteed income stream paid to you now, over a specified period of time or you can delay the payout to add growth to your principal.
4. Qualified or Not Qualified from a taxation perspective.
5. Single or Flexible premium payments
6. Single Life-Life Only-Lifetime of payments but no survivor benefit. Typically the highest payout available.
7. Life Annuity with Period Certain (Fixed Period/Guaranteed Term) – Minimum period of payments — even after the death of buyer — with remaining cash value paid to a beneficiary
8. Joint and Survivor Annuity – Payments that last for the lives of husband and wife.
9. Lump-Sum Payment – Distribution of an entire annuity with taxes due.
10. Systematic Annuity Withdrawal – Customized dollar amount and payment frequency.
11. Early Withdrawal – Withdrawal occurring before age 59 ½ with 10 percent tax penalty.
Once you have paid into your lifetime annuity; and begin collecting payments, you are guaranteed receipt of that income until your death. Insurance companies are able to offer this solution because money flows not only from your original investment (often over years or decades) but also from the profitable earnings on that money that was reinvested by your insurance agency.
Partial withdrawals from an annuity in the accumulation phase are taxed on a last in, first out (LIFO) basis. Withdrawals from an annuity are made earnings first, and the owner is taxed on the payments until all of the earnings have been distributed. Importantly, you will be taxed at your regular income tax rate instead of capital gains rates which have historically been lower; and which are only taxed when you withdraw your money. Since annuities do not have investment caps, they are preferred methods of setting up future income over 401(k)s and IRAs that have limited contribution amounts.
If you find yourself in a situation that requires your having to pay creditors, in many states, annuities, like life insurance, are protected from creditors. Creditors do not have a legal right to money that is controlled by your insurance company.
In fact, depending upon the legal jurisdiction in which you live, payments (some or all) may be protected from creditors.
This type of annuity was designed for people that want to try and capture some higher returns of the stock market, while still maintaining a minimal guarantee of principal and or income.