Annuities

An Annuity takes one of two forms:

It can be a Vehicle for accumulating Wealth that grows on a tax deferred basis until death or Converted to a flow of Income

It can be a Vehicle for distributing Wealth over a period of time.

FIXED - INDEXED - VARIABLE Annuities 

Fixed - Basics - some variations are out there depending on the specific product form each carrier. 

Basically works like a CD down at the bank.

The money sits there for a set period of time and earns a guaranteed rate of interest.

There is a penalty if you withdraw the funds before that set period of time elapses.

And the interst rate will be a bit better than you get from a CD.

You have the ability to draw 10% of the funds each year without a penalty (CD's don't offer that)

The holding period must be at least five years.

Indexed - Basics - some variations are out there depending on the specific product form each carrier. 

Basically works like a Fixed Annuity with a twist.

The money sits there for a set period of time and earns a guaranteed rate of interest with a twist.

There is a penalty if you withdraw the funds before that set period of time elapses.

The Twist - Earnings are tied to the S&P 500 or some other Stock Index. If the market goes up you go up, and if the market goes down, you DON'T go down.

That is right the twist is that you get to participate in the market and enjoy upward potential with NO DOWNSIDE RISK.

A great way to allow your money to participate it the gains of the stock market without subjecting it to the risk of downturns in the market. Great for IRA monies or extra money designated for use beyond 10 years.

You have the ability to draw 10% of the funds each year without a penalty (CD's don't offer that) and Required Minimum Distributions (RMDs) are allowed not subject to withdrawal penalties.

The holding period must be at least ten years.

I think this is where your IRA Funds should be that want to be conservative.

Variable - Basics - some variations are out there depending on the specific product form each carrier. 

Basically works like a Mutual Fund with tax deferred status like all annuities.

The money sits there for a set period of time and has earnings AND losses that are tied to the stock market.

There is a penalty if you withdraw the funds before that set period of time elapses.

If the market goes up you go up and if the market goes down you go down with it.

This is a higher risk product and I believe has no place for one who is no longer working to replace any losses.

You have the ability to draw 10% of the funds each year without a penalty (CD's don't offer that) and Required Minimum Distributions (RMDs) are allowed not subject to withdrawal penalties.

The holding period must be at least ten years.

Not for those with a low risk tollerance.

These products have their place in the portfolio and should not be overlooked.

His services should not be passed up - he may be able to move your money to a better position that you are in now. If you are in great shape he will let you know.

“In these uncertain times, it is our job as financial advisors to make sure that as many people as possible understand that there are a number of financial products that are more suited to their needs and goals than ever before. Whether you have a 401(k) at a previous employer, a current IRA or non-qualified money sitting in a CD you may be leaving money on the table as well as paying unnecessary taxes.” - Brandon Ashley

Money Matters – There are Three Kinds of Money – Leave Behind / Live On / I’m not sure.

• Leave Behind Money – If you have money you intend to leave behind to your heirs when you die and it is sitting in a CD, Savings Account or Volatile Market Account – We Need to talk about positioning that money so you don’t have to pay taxes on its future growth and it can pass free of tax to your heirs.
  
• Live On Money – The savings you have accumulated and are living on either the interest only or Principal and Interest – We should take a look at how that money is working for you now that you are no longer working. We might be able to put it in a better position to work harder for you and provide a better lifestyle.
  
• I’m Not Sure Money – Not sure if you are going to need to use it to live on or not? Give Brandon a call to help you sort it out.
  

If your money isn’t working hard enough give Brandon a call and he’ll see if he can’t crack the whip and get it going a little better.

Brandon Ashley

American Wealth Management

phone: (256) 442-7214

email: bashley@americanwealthmgt.com