Two certainties these days:
- We face more financial risk today than ever before – Market risks, investment risks, risks tied to our employment. Saving for the next year or the next decade is becoming harder and harder. Not much in life is certain any longer and finances are no exception.
- We face some of the lowest interest rates in history. It’s harder and harder to put our money to work for us.
Fortunately, we have a whole suite of cool solutions for those planning for retirement, OR, simply wishing to earn more on their long term savings “safe money”. Your Cool agent has access to the offerings of more than 60+ well known insurance companies, including some of the most recognizable names in the industry.
Most of our “growth” options fall into two general categories; Tax-Deferred Annuities and Retirement Plan Rollovers. Both of these are long-term strategies used, primarily, for the creation and accumulation of money to be used later in life. These would more than likely not be suitable strategies for short-term capital growth. In nearly all these type of accounts there are penalties for removing money prior to age 59 1/2.
We represent most of the major companies who market annuities. The companies to the right are a representative sample of those with competitive tax-deferred annuities. You can click their respective icon to learn more about the company you are interested in, or you can continue with this discussion by clicking one of the links in the next section.
What are Tax-Deferred Annuities?
“Annuities” are a type of contract between an insurance company and their clients in which the client invests premiums into the insurance company’s annuity contract (either in period payments or in a “Single Premium” sometimes referred to as an “SPDA“). In return, the insurance company provides their client with the potential for earnings, typically at a better rate than they might find in most other “safe money” investments. The earnings and principal are then paid out at a later date (deferred), or “annuitized”, meaning that at that point, the client is paid a lump sum, or begins to receive a series of periodic payments.
Many folks think annuities are complicated contracts, but our Cool agents can be as basic or as complex as you want when discussing the details in order to determine the right approach for you. After discussing annuities with an experienced Cool agent, we also recommend you discuss the strategy with your tax adviser. We can recommend someone if you need to find a tax adviser.
The TWO Fundamental Purposes for Tax-Deferred Annuities
- To accumulate funds on a tax-deferred basis for the long term. The benefit here is the compounding of interest on money that you would have had to remove in a taxable account to pay income taxes.
- To provide a source of income, guaranteed payable for life or for a specified period of time.
To these two fundamentals, the following can be added to further define the purpose and application of annuities.
- Deferred annuities are long-term products designed to provide benefits for a time later in life, typically retirement. They are not intended nor are they appropriate for short-term needs.
- Deferred annuities are primarily savings and investment products. A buyer can select a product design that matches his or her investment profile and tolerance for risk; “fixed-rate” annuities and to a large extent, “indexed” annuities are conservative vehicles, appropriate for “safe money” needs, while “variable” annuities offer the potential for market-based growth and market-based returns, neither of which are guaranteed.
For discussion on the three main types of annuities, FOLLOW THE TYPE OF ANNUITY YOU ARE INTERESTED IN BY CLICKING THE LINK.
- “FIXED-RATE” Annuities – These offer a fixed rate of return and are considered the safest of annuity types and comparable to other “Safe-Money” investments.
- “INDEXED” Annuities – These offer clients the ability to tie their rate of return to various market indexes (such as the S&P or other equity index) but also usually protects against downside risk. Also considered to be very conservative, “Safe-Money” investments.
- “VARIABLE” Annuities (VA) – These however offer the least amount of protection by “guarantee”. There is no guarantee of growth or of principal investment in a VA. The potential for returns is usually much greater though because they are the closest tied to the actual market performance.
Our Premier Providers – Coming Soon
We represent the following experienced providers of Tax-Deferred Annuities. You can click their respective icon to learn more about the company you are interested in, or continue with this discussion by clicking one of the links in the next section.
Retirement Rollover Options – COMING SOON
- Bankrate.com – Check your local bankrates, then call us. Let us show you how to EARN more on your retirement accounts and other accounts.
- Calcmoolator.com – A really cool tool to calculate returns in taxable vs. tax deferred accounts. Use this and/or Bankrate.com to research your options.
- Investopedia – Educating the world about finance.