Why An Annuity?

I recently had a conversation with one of my clients about their retirement plans. Of course, my client had seen commercials on television regarding annuities, but was confused at to what they were.
An annuity is contract between an insurance company and a contract owner. The money in the annuity has the potential to create an additional source of retirement income, and can provide a variety of income streams. Many individuals use annuities to help them achieve their long-term financial goals.
With an annuity, you can choose from a range of payout options including retirement income you cannot outlive. Since it's an insurance product, your money's potential growth is tax-deferred, which means you don't have to pay ordinary income taxes on your annuity's growth until you take withdrawals or start income payments. Compounded over time, tax-deferred interest can have a positive impact on the growth of your retirement reserves.
Also, if you die before you start taking an income from your annuity, your beneficiaries will receive a death benefit equal to the full accumulation value.
A fixed index annuity offers options that credit interest based on the changes in an external index that varies from day to day and is not predictable. Remember though, when you buy a fixed index annuity, you own an insurance contract and are not buying shares of any stock or index.
For more information, contact Chris Castanes.