Annuities
In the past, retirees could typically count on three sources of retirement income that divided roughly into thirds. The three sources of income have traditionally been government-funded Social Security, employer-sponsored components, and individual savings. With this traditional scenario, both the government and employer-sponsored components of the plan were considered predictable—reliable income sources that may also be adjusted for inflation. Only one-third of the plan, individual savings, was the responsibility of the individual. Today, however, due to employer-sponsored plans evolving from guaranteed pension payouts to more defined benefit contribution plans, which generally result in a payout at retirement based upon level of individual participation, the majority of the burden for retirement income seems to have shifted to the individual. For this reason, you may want to consider a guaranteed* fixed income component to your retirement strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed*.
An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed* payout options. Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year, up to a certain limit. However, withdrawals can reduce the value of the death benefit and excess withdrawals above the restricted limit typically incur surrender charges within the first five to fifteen years of the contract. Withdrawals will reduce the contract value and the value of any protection benefits, and because they are designed as a long-term retirement income vehicle, annuity withdrawals made before age 59½ are subject to a 10% penalty fee, and all withdrawals may be subject to income taxes.
* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods, which vary by carrier. Annuities are NOT FDIC insured.
Wealth Accumulation
Time doesn’t stand still, and neither does money. That’s why you should be using time to your advantage when investing for wealth accumulation. Bussenger Financial Group is here to help you design a smart, strategic plan for a financially stable future.
wealth-accumulation-with-bussenger-financial-group According to statistics the two most important factors in achieving wealth are the number of years you have consistently been saving and investing and the average proportion of funds allocated to investments of higher return.
Basically, factor number one: the longer span of time you invest, the more potential your money has to compound interest. If your financial portfolio has not fully recovered from losses in recent years, you may wish to consider a more aggressive allocation to make up for lost ground and get back on track to accumulating wealth. Which brings us to factor two: helping you designate funds towards high return investments.
However, given recent lessons learned in stock market investing, it is important to remember that more conservative retirement strategies typically have only a portion of the assets invested in the stock market. Other allocations should be set aside for more conservative investments and/or secured income contracts such as annuities. Annuities are long term vehicles designed to generate supplemental income during retirement. They have minimum guarantees backed by the strength and claims paying ability of the issuing insurance company. After all, the last thing you want to do is lose more ground during the next market correction.
To schedule a time to discuss your financial future, contact us by email at info@bussengerfinancialgroup.com or give us a call at (224) 655-2426 today!