What is an annuity? Part two of Jackson’s three part series explains what a fixed annuity is and how it can help you on your retirement journey.
Let's talk about Fixed Annuities
When it comes to investing for retirement, are you interested in protecting your principal, guaranteeing your growth, and leaving a legacy? If so, you should ask your financial professional how a fixed annuity may help you achieve these objectives.
Ask your financial professional about protecting your principal.
Running out of money is consistently cited as one of retirees’ greatest concerns and unpredictable stock market volatility may only exacerbate this worry. After all, the value of a retirement nest egg can fluctuate significantly depending on how much is allocated to stocks.
A fixed annuity, however, can help alleviate the fear of losing money because it does not involve an investment in the stock market. Instead, the principal is protected with a guaranteed interest rate backed by an insurer like Jackson.
Ask your financial professional about guaranteeing your growth.
Low-interest rate environments can be a real challenge for retirees with fixed incomes. When yields on traditional fixed-income investments are lower than expected, retirees' spending power declines, and anxiety rises.
A fixed annuity can help eliminate concerns about a reduction in income because it guarantees your principal’s growth. It does this through a fixed rate that adds interest to your account through the life of the annuity's contract.
Ask your financial professional about tax-deferred growth*.
The taxes you might pay on traditional investment earnings like interest, capital gains, and dividends can erode the value of your retirement savings. Fixed annuities leverage the power of tax deferral to let more of your earnings grow.
With a fixed annuity, interest earned is not subject to taxation until you take a withdrawal. This allows your principal to grow tax-deferred and puts more of your money to work, which can help you accumulate a larger retirement nest egg.
Ask your financial professional about leaving a legacy.
A fixed annuity also can help you address your desire to leave something of value to your heirs after your death. With a standard death benefit, your beneficiaries will receive a payout equal to the annuity's accumulated value if you die before distributions begin.
Payments are made directly to your beneficiaries, avoiding the costs and delays of probate. And there are no withdrawal charges on death benefit payments.
To learn more about fixed annuities, simply schedule a call or meeting with your financial professional and discuss if this investment vehicle is right for your retirement plan.
Annuities are long-term, tax-deferred vehicles designed for retirement. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.