Monday, November 24, 2008
Tax Deferred Fixed Annuities www.legacyannuities.com
IN SPITE OF WHAT WE SEE ON THE NEWS EVERY DAY THERE ARE REASONS TO BE OPTIMISTIC ABOUT THE FUTURE. PEOPLE ARE LIVING LONGER AND HEALTHY LIVES. AND ENJOYING THEMSELVES LONG AFTER THEY RETIRE. BUT TO REALIZE THE PROMISE OF THE FUTURE ONE MUST ALSO CONSIDER ITS CHALLENGES. WHAT ARE THE CHALLENGES THAT WE MUST BE PREPARED TO FACE IN THE FUTURE?
THERE IS THE CHALLENGE OF INFLATION.
THE CHALLENGE OF A VOLATILE INVESTMENTS AND SAVINGS ACCOUNTS. AS WE HAVE SEEN IN RECENT YEARS… INTEREST RATES CAN GO UP AND DOWN AND THE STOCK MARKET CAN GO UP AND DOWN.
THERE IS THE CHALLENGE OF TAXATION. I AM TALKING ABOUT NOT JUST INCOME TAXES, BUT CAPITAL GAINS TAX, TAX ON SOCIAL SECURITY INCOME AND ESTATE TAXES AS WELL.
THESE ARE ALL CHALLENGES THAT YOU HAVE PROBABLY THOUGHT ABOUT FROM TIME TO TIME. BUT THERE IS ONE ADDITIONAL CHALLENGE THAT I FIND THAT MANY PEOPLE DON’T REALLY PAY MUCH ATTENTION TO AND THAT IS THE CHALLENGE OF THE POTENTIAL THAT IF WE LIVE LONG ENOUGH WE MIGHT OUTLIVING OUR INCOME.
OVER THE NEXT FEW MINUTES I AM GOING TO TALK NOT ONLY ABOUT THESE CHALLENGES… I AM GOING TO TALK ABOUT A POSSIBLE SOLUTION AS WELL.
FIRST, LET’S TALK A LITTLE MORE ABOUT INFLATION. THIS SLIDE SHOWS THE PRICES FOR MANY OF THE THINGS WE ALL BY AS THEY WERE IN 1963 AND THEN WHAT THEY HAD INCREASED TO BY THE YEAR 2000. THE CONCERN THAT WE ALL MUST SHARE IS… WILL OUR INCOME KEEP PACE WITH ANY POTENTIAL INCREASES IN FUTURE COSTS OF LIVING?
IN SPITE OF WHAT WE SEE ON THE NEWS EVERY DAY THERE ARE REASONS TO BE OPTIMISTIC ABOUT THE FUTURE. PEOPLE ARE LIVING LONGER AND HEALTHY LIVES. AND ENJOYING THEMSELVES LONG AFTER THEY RETIRE. BUT TO REALIZE THE PROMISE OF THE FUTURE ONE MUST ALSO CONSIDER ITS CHALLENGES. WHAT ARE THE CHALLENGES THAT WE MUST BE PREPARED TO FACE IN THE FUTURE?
THERE IS THE CHALLENGE OF INFLATION.
THE CHALLENGE OF A VOLATILE INVESTMENTS AND SAVINGS ACCOUNTS. AS WE HAVE SEEN IN RECENT YEARS… INTEREST RATES CAN GO UP AND DOWN AND THE STOCK MARKET CAN GO UP AND DOWN.
THERE IS THE CHALLENGE OF TAXATION. I AM TALKING ABOUT NOT JUST INCOME TAXES, BUT CAPITAL GAINS TAX, TAX ON SOCIAL SECURITY INCOME AND ESTATE TAXES AS WELL.
THESE ARE ALL CHALLENGES THAT YOU HAVE PROBABLY THOUGHT ABOUT FROM TIME TO TIME. BUT THERE IS ONE ADDITIONAL CHALLENGE THAT I FIND THAT MANY PEOPLE DON’T REALLY PAY MUCH ATTENTION TO AND THAT IS THE CHALLENGE OF THE POTENTIAL THAT IF WE LIVE LONG ENOUGH WE MIGHT OUTLIVING OUR INCOME.
OVER THE NEXT FEW MINUTES I AM GOING TO TALK NOT ONLY ABOUT THESE CHALLENGES… I AM GOING TO TALK ABOUT A POSSIBLE SOLUTION AS WELL.
FIRST, LET’S TALK A LITTLE MORE ABOUT INFLATION. THIS SLIDE SHOWS THE PRICES FOR MANY OF THE THINGS WE ALL BY AS THEY WERE IN 1963 AND THEN WHAT THEY HAD INCREASED TO BY THE YEAR 2000. THE CONCERN THAT WE ALL MUST SHARE IS… WILL OUR INCOME KEEP PACE WITH ANY POTENTIAL INCREASES IN FUTURE COSTS OF LIVING?
Tax Deferred Fixed Annuities http://www.legacyannuities.com/
IF IT DOESN’T, THEN WE WILL BE FORCED TO DEAL WITH SOME VERY MAJOR PROBLEMS. FOR EXAMPLE, AT 4% INFLATION, THE PURCHASING POWER OF $100,000 ERODES TO JUST $30,000 OVER A PERIOD OF 35 YEARS. THAT WOULD MEAN THAT OUR SAVINGS WOULD ONLY BUY ABOUT ONE THIRD OF IT WOULD TODAY!
CALACULATING THE IMPACT OF FUTURE INFLATION IS PRETTY EASY IF WE FOLLOW A FORMULA REFERRED TO AS THE RULE OF 72. TO FIND HOW LONG IT WILL TAKE PRICES OF GOODS AND SERVICES TO DOUBLE ALL WE DO IS DIVIDE THE NUMBER 72 BY THE CURRENT INFLATION RATE. FOR EXAMPLE, IF THE INFLATION RATE IS 4% THEN 72 / 4% EQUALS 18. THAT MEANS THAT IN 18 YEARS PRICES WILL DOUBLE… OR ANOTHER WAY OF LOKKING AT IT IS THAT IN 18 YEARS OUR SAVINGS IS WORTH HALF (IN TERMS OF PURCHASING POWER) OF WHAT IT IS WORTH TODAY.
IF THE INFLATION RATE AVERAGED 2% THEN IT WOULD TAKE 36 YEARS FOR PRICES TO DOUBLE. AT A 10% INFLATION RATE PRICES DOUBLE IN ONLY A LITTLE MORE THAN 7 YEARS.
NO ONE KNOWS WHAT FUTURE RATES OF INFLATION WILL BE, BUT AT ALMOST ANY LEVEL INFLATION MEANS A POTENTIAL PROBLEM.
PEOPLE CONCERNED WITH INFLATION OFTEN TURN TO THE EQUITY MARKETS. THEY VIEW THE HISTORICAL STEADY CLIMB OF EQUITIES AS A WAY TO HELP COMBAT THE EFFECTS OF INFLATION. HOWEVER… WHILE PAST PERFORMANCE OF THE STOCK MARKET IN GENERAL MIGHT BE IMPRESSIVE, THERE ARE NO GUARANTEES REGARDING FUTURE PERFORMANCE.
EVEN POWERFUL LONG-TERM UPWARD TRENDS ARE USUALLY MADE UP OF A SERIES OF SHORTER-TERM UPS AND DOWNS.
THE VOLATILITY OF EQUITIES HAS CAUSED EVEN THE MOST EXPERIENCED INVESTORS TO SUFFER THROUGH MANY SLEEPLESS NIGHTS.
THE DOWN PERIODS CAN PRESENT SPECIAL PROBLEMS FOR RETIREES WHO HAVE AN IMMEDIATE NEED TO ACCESS SAVINGS TO PAY FOR UNEXPECTED MEDICAL EXPENSES OR FOR OTHER UNFORESEEN EMERGENCIES.
MANY RETIREES WHO ARE ADVERSE TO THE RISK OF MARKET VOLATILITY PLACE A LARGE PORTION OF THEIR SAVINGS IN BANK CDs. THIS CAN ALLOW THEM TO AVOID THE UPS AND DOWNS OF EQUITIES AND ALLOW THEM TO SLEEP MORE PEACEFULLY
IF IT DOESN’T, THEN WE WILL BE FORCED TO DEAL WITH SOME VERY MAJOR PROBLEMS. FOR EXAMPLE, AT 4% INFLATION, THE PURCHASING POWER OF $100,000 ERODES TO JUST $30,000 OVER A PERIOD OF 35 YEARS. THAT WOULD MEAN THAT OUR SAVINGS WOULD ONLY BUY ABOUT ONE THIRD OF IT WOULD TODAY!
CALACULATING THE IMPACT OF FUTURE INFLATION IS PRETTY EASY IF WE FOLLOW A FORMULA REFERRED TO AS THE RULE OF 72. TO FIND HOW LONG IT WILL TAKE PRICES OF GOODS AND SERVICES TO DOUBLE ALL WE DO IS DIVIDE THE NUMBER 72 BY THE CURRENT INFLATION RATE. FOR EXAMPLE, IF THE INFLATION RATE IS 4% THEN 72 / 4% EQUALS 18. THAT MEANS THAT IN 18 YEARS PRICES WILL DOUBLE… OR ANOTHER WAY OF LOKKING AT IT IS THAT IN 18 YEARS OUR SAVINGS IS WORTH HALF (IN TERMS OF PURCHASING POWER) OF WHAT IT IS WORTH TODAY.
IF THE INFLATION RATE AVERAGED 2% THEN IT WOULD TAKE 36 YEARS FOR PRICES TO DOUBLE. AT A 10% INFLATION RATE PRICES DOUBLE IN ONLY A LITTLE MORE THAN 7 YEARS.
NO ONE KNOWS WHAT FUTURE RATES OF INFLATION WILL BE, BUT AT ALMOST ANY LEVEL INFLATION MEANS A POTENTIAL PROBLEM.
PEOPLE CONCERNED WITH INFLATION OFTEN TURN TO THE EQUITY MARKETS. THEY VIEW THE HISTORICAL STEADY CLIMB OF EQUITIES AS A WAY TO HELP COMBAT THE EFFECTS OF INFLATION. HOWEVER… WHILE PAST PERFORMANCE OF THE STOCK MARKET IN GENERAL MIGHT BE IMPRESSIVE, THERE ARE NO GUARANTEES REGARDING FUTURE PERFORMANCE.
EVEN POWERFUL LONG-TERM UPWARD TRENDS ARE USUALLY MADE UP OF A SERIES OF SHORTER-TERM UPS AND DOWNS.
THE VOLATILITY OF EQUITIES HAS CAUSED EVEN THE MOST EXPERIENCED INVESTORS TO SUFFER THROUGH MANY SLEEPLESS NIGHTS.
THE DOWN PERIODS CAN PRESENT SPECIAL PROBLEMS FOR RETIREES WHO HAVE AN IMMEDIATE NEED TO ACCESS SAVINGS TO PAY FOR UNEXPECTED MEDICAL EXPENSES OR FOR OTHER UNFORESEEN EMERGENCIES.
MANY RETIREES WHO ARE ADVERSE TO THE RISK OF MARKET VOLATILITY PLACE A LARGE PORTION OF THEIR SAVINGS IN BANK CDs. THIS CAN ALLOW THEM TO AVOID THE UPS AND DOWNS OF EQUITIES AND ALLOW THEM TO SLEEP MORE PEACEFULLY
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Tax Deferred Fixed Annuities www.legacyannuities.com
WHILE CDs PROTECT YOUR SAVINGS FROM MARKET RISK, THE INTEREST RATES YOU EARN CAN FLUCTUATE DRAMATICALLY OVER TIME. VOLATILITY OF INTEREST RATES CAN CAUSE AS MANY SLEEPLESS NIGHTS AS THE UPS AND DOWNS OF EQUITIES… ESPECIALLY FOR THOSE LIVING ON A FIXED RETIREMENT INCOME.
DURING PERIODS WHEN INTEREST RATES ARE LOW… AFTER TAXES AND INFLATION YOU MAY FACE A LOSS OF PURCHASING POWER WITH CDs.
CONSIDER THE IMPACT OF INFLATION AND TAXES ON INTEREST EARNINGS. EARNINGS FROM CDs ARE CURRENTLY TAXABLE IN THE YEAR EARNED, WHETHER THEY ARE WITHDRAWN OR LEFT TO ACCUMULATE.
AFTER DEDUCTING YOUR INCOME TAXES….
YOU CAN SEE THAT NET EARNINGS ARE ACTUALLY MUCH LOWER.
THEN, BY FACTORING IN A HYPOTHETICAL RATE OF INFLATION….
THESE NET EARNINGS FURTHER ERODE INTO A NEGATIVE REAL RATE OF RETURN.
PERHAPS INFLATION WILL BE HELD IN CHECK OVER THE NEXT 20 OR 30 YEARS. AND, PERHAPS INCOME TAXES WILL NOT TOUCH US AS SEVERELY. BUT… IF INFLATION AND INCOME TAXES ARE A PROBLEM IN THE FUTURE, AS THEY HAVE BEEN IN THE PAST, IT WILL LIKELY HAVE A MOST DRAMATIC EFFECT ON THOSE RETIRED AND LIVING ON A FIXED INCOME.
WHILE CDs PROTECT YOUR SAVINGS FROM MARKET RISK, THE INTEREST RATES YOU EARN CAN FLUCTUATE DRAMATICALLY OVER TIME. VOLATILITY OF INTEREST RATES CAN CAUSE AS MANY SLEEPLESS NIGHTS AS THE UPS AND DOWNS OF EQUITIES… ESPECIALLY FOR THOSE LIVING ON A FIXED RETIREMENT INCOME.
DURING PERIODS WHEN INTEREST RATES ARE LOW… AFTER TAXES AND INFLATION YOU MAY FACE A LOSS OF PURCHASING POWER WITH CDs.
CONSIDER THE IMPACT OF INFLATION AND TAXES ON INTEREST EARNINGS. EARNINGS FROM CDs ARE CURRENTLY TAXABLE IN THE YEAR EARNED, WHETHER THEY ARE WITHDRAWN OR LEFT TO ACCUMULATE.
AFTER DEDUCTING YOUR INCOME TAXES….
YOU CAN SEE THAT NET EARNINGS ARE ACTUALLY MUCH LOWER.
THEN, BY FACTORING IN A HYPOTHETICAL RATE OF INFLATION….
THESE NET EARNINGS FURTHER ERODE INTO A NEGATIVE REAL RATE OF RETURN.
PERHAPS INFLATION WILL BE HELD IN CHECK OVER THE NEXT 20 OR 30 YEARS. AND, PERHAPS INCOME TAXES WILL NOT TOUCH US AS SEVERELY. BUT… IF INFLATION AND INCOME TAXES ARE A PROBLEM IN THE FUTURE, AS THEY HAVE BEEN IN THE PAST, IT WILL LIKELY HAVE A MOST DRAMATIC EFFECT ON THOSE RETIRED AND LIVING ON A FIXED INCOME.
Labels: www.legacyannuities.com
WHILE CDs PROTECT YOUR SAVINGS FROM MARKET RISK, THE INTEREST RATES YOU EARN CAN FLUCTUATE DRAMATICALLY OVER TIME. VOLATILITY OF INTEREST RATES CAN CAUSE AS MANY SLEEPLESS NIGHTS AS THE UPS AND DOWNS OF EQUITIES… ESPECIALLY FOR THOSE LIVING ON A FIXED RETIREMENT INCOME.
DURING PERIODS WHEN INTEREST RATES ARE LOW… AFTER TAXES AND INFLATION YOU MAY FACE A LOSS OF PURCHASING POWER WITH CDs.
CONSIDER THE IMPACT OF INFLATION AND TAXES ON INTEREST EARNINGS. EARNINGS FROM CDs ARE CURRENTLY TAXABLE IN THE YEAR EARNED, WHETHER THEY ARE WITHDRAWN OR LEFT TO ACCUMULATE.
AFTER DEDUCTING YOUR INCOME TAXES….
YOU CAN SEE THAT NET EARNINGS ARE ACTUALLY MUCH LOWER.
THEN, BY FACTORING IN A HYPOTHETICAL RATE OF INFLATION….
THESE NET EARNINGS FURTHER ERODE INTO A NEGATIVE REAL RATE OF RETURN.
PERHAPS INFLATION WILL BE HELD IN CHECK OVER THE NEXT 20 OR 30 YEARS. AND, PERHAPS INCOME TAXES WILL NOT TOUCH US AS SEVERELY. BUT… IF INFLATION AND INCOME TAXES ARE A PROBLEM IN THE FUTURE, AS THEY HAVE BEEN IN THE PAST, IT WILL LIKELY HAVE A MOST DRAMATIC EFFECT ON THOSE RETIRED AND LIVING ON A FIXED INCOME.
DURING PERIODS WHEN INTEREST RATES ARE LOW… AFTER TAXES AND INFLATION YOU MAY FACE A LOSS OF PURCHASING POWER WITH CDs.
CONSIDER THE IMPACT OF INFLATION AND TAXES ON INTEREST EARNINGS. EARNINGS FROM CDs ARE CURRENTLY TAXABLE IN THE YEAR EARNED, WHETHER THEY ARE WITHDRAWN OR LEFT TO ACCUMULATE.
AFTER DEDUCTING YOUR INCOME TAXES….
YOU CAN SEE THAT NET EARNINGS ARE ACTUALLY MUCH LOWER.
THEN, BY FACTORING IN A HYPOTHETICAL RATE OF INFLATION….
THESE NET EARNINGS FURTHER ERODE INTO A NEGATIVE REAL RATE OF RETURN.
PERHAPS INFLATION WILL BE HELD IN CHECK OVER THE NEXT 20 OR 30 YEARS. AND, PERHAPS INCOME TAXES WILL NOT TOUCH US AS SEVERELY. BUT… IF INFLATION AND INCOME TAXES ARE A PROBLEM IN THE FUTURE, AS THEY HAVE BEEN IN THE PAST, IT WILL LIKELY HAVE A MOST DRAMATIC EFFECT ON THOSE RETIRED AND LIVING ON A FIXED INCOME.
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Tax Deferred Fixed Annuities www.legacyannuities.com
TO MAKE MATTERS WORSE, SOCIAL SECURITY IS NOW CONSIDERED TAXABLE INCOME FOR MANY RETIREES. BACK IN 1935 FRANKLIN ROOSEVELT PROMISED THAT THERE WOULD NEVER BE A TAX ON SOCIAL SECURITY BENEFITS.
BUT TODAY IT HAS BECOME A TAX BURDEN THAT MANY RETIREES ARE ASKED TO BEAR.
IN 1984 LEGISLATION WAS ENACTED THAT SHOCKINGLY FORCED MANY SOCIAL SECURITY RECIPIENTS TO COUNT 50% OF THEIR SOCIAL SECURITY INCOME AS TAXABLE INCOME.
IN 1993 PEOPLE WERE SHOCKED AGAIN AS RETIREES WITH GREATER INCOME WERE FORCED TO COUNT UP TO 85% OF THEIR SOCIAL SECURITY AS TAXABLE INCOME.
WILL WE BE SHOCKED AGAIN IF FUTURE LEGISLATION TAXES EVEN MORE OF OUR SOCIAL SECURITY BENEFITS?
TODAY TAXES CAN TAKE A THIRD OR MORE OF YOUR SAVING’S INTEREST, DIVIDENDS AND CAPITAL GAINS EACH YEAR.
INFLATION CAN SILENTLY DESTROY THE PURCHASING POWER OF A LARGE PORTION OF WHAT REMAINS…
YOU ARE LEFT WITH THE REMAINDER TO HELP MEET THE CHALLENGES OF THE FUTURE.
OF THE FUTURE CHALLENGES WHICH SHOULD BE OF MOST CONCERN? PERHAPS IT IS THE POSSIBILITY THAT WE MIGHT LIVE SO LONG AS TO ONE DAY OUTLIVE OUR ASSETS!
CONSIDER THAT IN 1900, THE APPROXIMATE LIFE EXPECTANCY WAS 45 YEARS. IN 1990 IT HAD INCREASED TO 75. BECAUSE OF THE ADVANCES OF SCIENCE AND MEDICINE MANY OF US CAN NOW EXPECT TO SPEND 20, 30 OR MORE YEARS IN RETIREMENT. IN FACT, ONE OF THE FASTEST GROWING GROUPS IN AMERICA ARE THE SO-CALLED “CENTURIONS” — PEOPLE LIVING BEYOND AGE 100. WITH THIS INCREASED LONGEVITY COMES THE RISK OF DEPLETING OUR ASSETS DURING OUR LIFETIME AND POSSIBLY OUTLIVING OUR INCOME!
TO MAKE MATTERS WORSE, SOCIAL SECURITY IS NOW CONSIDERED TAXABLE INCOME FOR MANY RETIREES. BACK IN 1935 FRANKLIN ROOSEVELT PROMISED THAT THERE WOULD NEVER BE A TAX ON SOCIAL SECURITY BENEFITS.
BUT TODAY IT HAS BECOME A TAX BURDEN THAT MANY RETIREES ARE ASKED TO BEAR.
IN 1984 LEGISLATION WAS ENACTED THAT SHOCKINGLY FORCED MANY SOCIAL SECURITY RECIPIENTS TO COUNT 50% OF THEIR SOCIAL SECURITY INCOME AS TAXABLE INCOME.
IN 1993 PEOPLE WERE SHOCKED AGAIN AS RETIREES WITH GREATER INCOME WERE FORCED TO COUNT UP TO 85% OF THEIR SOCIAL SECURITY AS TAXABLE INCOME.
WILL WE BE SHOCKED AGAIN IF FUTURE LEGISLATION TAXES EVEN MORE OF OUR SOCIAL SECURITY BENEFITS?
TODAY TAXES CAN TAKE A THIRD OR MORE OF YOUR SAVING’S INTEREST, DIVIDENDS AND CAPITAL GAINS EACH YEAR.
INFLATION CAN SILENTLY DESTROY THE PURCHASING POWER OF A LARGE PORTION OF WHAT REMAINS…
YOU ARE LEFT WITH THE REMAINDER TO HELP MEET THE CHALLENGES OF THE FUTURE.
OF THE FUTURE CHALLENGES WHICH SHOULD BE OF MOST CONCERN? PERHAPS IT IS THE POSSIBILITY THAT WE MIGHT LIVE SO LONG AS TO ONE DAY OUTLIVE OUR ASSETS!
CONSIDER THAT IN 1900, THE APPROXIMATE LIFE EXPECTANCY WAS 45 YEARS. IN 1990 IT HAD INCREASED TO 75. BECAUSE OF THE ADVANCES OF SCIENCE AND MEDICINE MANY OF US CAN NOW EXPECT TO SPEND 20, 30 OR MORE YEARS IN RETIREMENT. IN FACT, ONE OF THE FASTEST GROWING GROUPS IN AMERICA ARE THE SO-CALLED “CENTURIONS” — PEOPLE LIVING BEYOND AGE 100. WITH THIS INCREASED LONGEVITY COMES THE RISK OF DEPLETING OUR ASSETS DURING OUR LIFETIME AND POSSIBLY OUTLIVING OUR INCOME!
Labels: www.legacyannuities.com
Tax Deferred Fixed Annuities www.legacyannuities.com
WHEN CONSIDERING THE EFFECTS OF INFLATION, VOLATILE INTEREST RATES AND FINANCIAL MARKETS, TAXATION … AND THE POSSIBILITY OF OUTLIVING OUR INCOME, ONE MUST WONDER IF THERE IS A PRODUCT THAT CAN HELP MEET THESE CHALLENGES?
FORTUNATELY THE ANSWER IS YES IT IS THE TAX-DEFERRED FIXED ANNUITY.
FIXED ANNUITIES PROVIDE A MINIMUM GUARANTEED INTEREST RATE. GENERALLY TRADITIONAL FIXED ANNUITIES GUARANTEE A HIGHER INTEREST RATE FOR ONE YEAR AND THEN THAT RATE CAN FLUCTUATE THROUGHOUT THE LIFE OF THE CONTRACT….
BUT IT CAN NEVER FALL BELOW THE MINIMUM GUARANTEED RATE.
THIS MINIMUM GUARANTEED INTEREST RATE CAN PROVIDE AN ATTRACTIVE ALTERNATIVE WHEN INTEREST RATES AND THE EQUITY MARKETS ARE PARTICULARLY VOLATILE.
ONE FORM OF A FIXED ANNUITY IS THE EQUITY INDEXED ANNUITY WHICH PROVIDES THE OPPORTUNITY FOR GAINS LINKED TO AN INDEX SUCH AS THE S&P 500, BUT WITH NO MARKET RISK TO PRINCIPAL. IF THE STRUCTURE OF THE EQUITY INDEXED ANNUITY DOES GENERATE EARNINGS IN ADDITION TO THE MINIMUM GUARANTEES, THOSE EARNINGS COULD HELP OFFSET THE EFFECTS OF FUTURE INFLATION.
THE WITHDRAWAL OPTIONS OF ANNUITIES ARE ALSO UNIQUELY SUITED TO HELP DEAL WITH THE POSSIBLY OUTLIVING OUR ASSETS.
AT MATURITY YOU MAY DECIDE TO WITHDRAW THE MONEY THAT YOU’VE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE.
, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS.
WHEN CONSIDERING THE EFFECTS OF INFLATION, VOLATILE INTEREST RATES AND FINANCIAL MARKETS, TAXATION … AND THE POSSIBILITY OF OUTLIVING OUR INCOME, ONE MUST WONDER IF THERE IS A PRODUCT THAT CAN HELP MEET THESE CHALLENGES?
FORTUNATELY THE ANSWER IS YES IT IS THE TAX-DEFERRED FIXED ANNUITY.
FIXED ANNUITIES PROVIDE A MINIMUM GUARANTEED INTEREST RATE. GENERALLY TRADITIONAL FIXED ANNUITIES GUARANTEE A HIGHER INTEREST RATE FOR ONE YEAR AND THEN THAT RATE CAN FLUCTUATE THROUGHOUT THE LIFE OF THE CONTRACT….
BUT IT CAN NEVER FALL BELOW THE MINIMUM GUARANTEED RATE.
THIS MINIMUM GUARANTEED INTEREST RATE CAN PROVIDE AN ATTRACTIVE ALTERNATIVE WHEN INTEREST RATES AND THE EQUITY MARKETS ARE PARTICULARLY VOLATILE.
ONE FORM OF A FIXED ANNUITY IS THE EQUITY INDEXED ANNUITY WHICH PROVIDES THE OPPORTUNITY FOR GAINS LINKED TO AN INDEX SUCH AS THE S&P 500, BUT WITH NO MARKET RISK TO PRINCIPAL. IF THE STRUCTURE OF THE EQUITY INDEXED ANNUITY DOES GENERATE EARNINGS IN ADDITION TO THE MINIMUM GUARANTEES, THOSE EARNINGS COULD HELP OFFSET THE EFFECTS OF FUTURE INFLATION.
THE WITHDRAWAL OPTIONS OF ANNUITIES ARE ALSO UNIQUELY SUITED TO HELP DEAL WITH THE POSSIBLY OUTLIVING OUR ASSETS.
AT MATURITY YOU MAY DECIDE TO WITHDRAW THE MONEY THAT YOU’VE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE.
, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS.
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Tax Deferred Fixed Annuities www.legacyannuities.com
BUT IT CAN NEVER FALL BELOW THE MINIMUM GUARANTEED RATE.
THIS MINIMUM GUARANTEED INTEREST RATE CAN PROVIDE AN ATTRACTIVE ALTERNATIVE WHEN INTEREST RATES AND THE EQUITY MARKETS ARE PARTICULARLY VOLATILE.
ONE FORM OF A FIXED ANNUITY IS THE EQUITY INDEXED ANNUITY WHICH PROVIDES THE OPPORTUNITY FOR GAINS LINKED TO AN INDEX SUCH AS THE S&P 500, BUT WITH NO MARKET RISK TO PRINCIPAL. IF THE STRUCTURE OF THE EQUITY INDEXED ANNUITY DOES GENERATE EARNINGS IN ADDITION TO THE MINIMUM GUARANTEES, THOSE EARNINGS COULD HELP OFFSET THE EFFECTS OF FUTURE INFLATION.
THE WITHDRAWAL OPTIONS OF ANNUITIES ARE ALSO UNIQUELY SUITED TO HELP DEAL WITH THE POSSIBLY OUTLIVING OUR ASSETS.
AT MATURITY YOU MAY DECIDE TO WITHDRAW THE MONEY THAT YOU’VE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE.
OR, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS.
BUT IT CAN NEVER FALL BELOW THE MINIMUM GUARANTEED RATE.
THIS MINIMUM GUARANTEED INTEREST RATE CAN PROVIDE AN ATTRACTIVE ALTERNATIVE WHEN INTEREST RATES AND THE EQUITY MARKETS ARE PARTICULARLY VOLATILE.
ONE FORM OF A FIXED ANNUITY IS THE EQUITY INDEXED ANNUITY WHICH PROVIDES THE OPPORTUNITY FOR GAINS LINKED TO AN INDEX SUCH AS THE S&P 500, BUT WITH NO MARKET RISK TO PRINCIPAL. IF THE STRUCTURE OF THE EQUITY INDEXED ANNUITY DOES GENERATE EARNINGS IN ADDITION TO THE MINIMUM GUARANTEES, THOSE EARNINGS COULD HELP OFFSET THE EFFECTS OF FUTURE INFLATION.
THE WITHDRAWAL OPTIONS OF ANNUITIES ARE ALSO UNIQUELY SUITED TO HELP DEAL WITH THE POSSIBLY OUTLIVING OUR ASSETS.
AT MATURITY YOU MAY DECIDE TO WITHDRAW THE MONEY THAT YOU’VE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE.
OR, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS.
Labels: www.legacyannuities.com
Tax Deferred Fixed Annuities www.legacyannuities.com
ONE OPTION WILL GUARANTEE A MONTHLY INCOME FOR AS LONG AS YOU LIVE. A GUARANTEED LIFETIME INCOME CAN GO A LONG WAY TO PROVIDING THE PEACE OF MIND NEEDED TO ENJOY MANY FUTURE RETIREMENT YEARS.
AND, ANNUITIES PROVIDE AN OPPORTUNITY FOR TAX-DEFERRED GROWTH.
THE INCOME TAX ON YOUR ANNUITY’S INTEREST EARNINGS IS DEFERRED UNTIL YOU CHOOSE TO ACCESS YOUR SAVINGS.
THIS MEANS THAT AS LONG AS THE MONEY STAYS WITHIN THE ANNUITY YOU HAVE THE TRIPLE ADVANTAGE OF…
EARNING INTEREST ON YOUR PREMIUMM
EARNING INTEREST ON YOUR INTEREST,
AND INTEREST ON THE MONEY THAT YOU WOULD OTHERWISE HAVE PAID IN CURRENT TAXES.
FIXED ANNUITIES CAN HELP YOU DEAL WITH VOLATILITY BY PROVIDING ADDITIONAL OPPORTUNITIES FOR DIVERSIFYING YOUR INVESTMENTS. IF YOUR INVESTMENT PORTFOLIO RELIES TOO HEAVILY ON HIGHER OR MODERATE RISK INVESTMENTS, THE SAFETY AND GUARANTEES OF FIXED ANNUITIES CAN PROVIDE AN EXCELLENT ALTERNATIVE.
PEOPLE DETERMINED TO PLACE ALL OF THEIR SAVINGS ONLY IN VEHICLES THAT PROVIDE SAFETY OF PRINCIPAL CAN LOOK UPON FIXED ANNUITIES AS AN OPTION FOR EVEN GREATER DIVERSIFICATION AMONG SAFETY ORIENTED INVESTMENTS.
ONE OPTION WILL GUARANTEE A MONTHLY INCOME FOR AS LONG AS YOU LIVE. A GUARANTEED LIFETIME INCOME CAN GO A LONG WAY TO PROVIDING THE PEACE OF MIND NEEDED TO ENJOY MANY FUTURE RETIREMENT YEARS.
AND, ANNUITIES PROVIDE AN OPPORTUNITY FOR TAX-DEFERRED GROWTH.
THE INCOME TAX ON YOUR ANNUITY’S INTEREST EARNINGS IS DEFERRED UNTIL YOU CHOOSE TO ACCESS YOUR SAVINGS.
THIS MEANS THAT AS LONG AS THE MONEY STAYS WITHIN THE ANNUITY YOU HAVE THE TRIPLE ADVANTAGE OF…
EARNING INTEREST ON YOUR PREMIUMM
EARNING INTEREST ON YOUR INTEREST,
AND INTEREST ON THE MONEY THAT YOU WOULD OTHERWISE HAVE PAID IN CURRENT TAXES.
FIXED ANNUITIES CAN HELP YOU DEAL WITH VOLATILITY BY PROVIDING ADDITIONAL OPPORTUNITIES FOR DIVERSIFYING YOUR INVESTMENTS. IF YOUR INVESTMENT PORTFOLIO RELIES TOO HEAVILY ON HIGHER OR MODERATE RISK INVESTMENTS, THE SAFETY AND GUARANTEES OF FIXED ANNUITIES CAN PROVIDE AN EXCELLENT ALTERNATIVE.
PEOPLE DETERMINED TO PLACE ALL OF THEIR SAVINGS ONLY IN VEHICLES THAT PROVIDE SAFETY OF PRINCIPAL CAN LOOK UPON FIXED ANNUITIES AS AN OPTION FOR EVEN GREATER DIVERSIFICATION AMONG SAFETY ORIENTED INVESTMENTS.
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Tax Deferred Fixed Annuities www.legacyannuities.com
COMBINING THE SAFETY OF FIXED ANNUITIES WITH THE ADVANTAGE OF TAX-DEFERRED GROWTH PROVIDES MANY CONSERVATIVE INVESTORS WITH A WAY TO INCREASE THE NET AFTER-TAX GROWTH OF THEIR EARNINGS WITHOUT EXPOSING THEIR PRINCIPAL TO MARKET RISK. TO ILLUSTRATE THIS ADVANTAGE CONSIDER TWO $50,000 SUMS COMPOUNDING AT THE HYPOTHETICAL RATE OF 6%. (PLEASE NOTE THAT WE ARE SELECTING 6% TO ILLUSTRATE THE EFFECT OF TAXATION ON GROWTH ONLY. ACTUAL INTEREST EARNINGS OF FIXED ANNUITIES OR OTHER INVESTMENTS COULD BE LOWER OR HIGHER THEN THIS RATE.)
WITH TAXES BEING PAID EACH YEAR THE CURRENTLY TAXED SUM WOULD GROW TO $76,322 AFTER 10 YEARS. BUT IF THE TAXES ARE DEFERRED THE EFFECT OF COMPOUNDING IS MORE PRONOUNCED SO THE TOTAL AT THE END OF 10 YEARS IS $89,542. EVEN IF ALL OF THE TAXES WERE PAID AT THIS TIME, $78,470 WOULD REMAIN. THE NET EFFECT IS THAT AFTER TAXES OVER $2,000 MORE IS LEFT WHEN INCOME TAXES WERE DEFERRED FOR 10 YEARS.
INSTEAD OF 10 YEARS LETS ASSUME THAT THE ENTIRE $89,542 SUM CONTINUES TO GROW TAX-DEFERRED FOR 20 YEARS. NOW THE TOTAL WOULD BE $160,355. IF ALL OF THE TAXES WERE PAID AT THE END OF THIS PERIOD, $129,456 WOULD REMAIN. THAT’S ALMOST $13,000 MORE THEN IF THE INCOME TAXES WERE PAID EACH YEAR.
WHAT IF THE TAXES WERE DEFERRED FOR A TOTAL OF 30 YEARS? THE ORIGINAL SUM OF $50,000 WOULD HAVE GROWN TO $287,175. EVEN AFTER PAYING ALL OF THE INCOME TAX ON THIS GAIN, THERE WOULD STILL BE A TOTAL OF $220,765 DOLLARS REMAINING. CONTRAST THIS TO THE $177,830 THAT IS LEFT WHEN TAXES ARE PAID EACH YEAR. OVER THIRTY YEARS, TAX DEFERRAL GENERATES ALMOST $43,000 MORE AFTER ALL OF THE INCOME TAXES ARE PAID!
REMEMBER, WITH AN ANNUITY YOU PAY THE INCOME TAX ON YOUR INTEREST EARNINGS ONLY WHEN YOU CHOOSE TO ACCESS YOUR SAVINGS. SO YOU HAVE THE ADVANTAGE OF CONTROLLING WHEN THE TAXES WILL BE PAID.
COMBINING THE SAFETY OF FIXED ANNUITIES WITH THE ADVANTAGE OF TAX-DEFERRED GROWTH PROVIDES MANY CONSERVATIVE INVESTORS WITH A WAY TO INCREASE THE NET AFTER-TAX GROWTH OF THEIR EARNINGS WITHOUT EXPOSING THEIR PRINCIPAL TO MARKET RISK. TO ILLUSTRATE THIS ADVANTAGE CONSIDER TWO $50,000 SUMS COMPOUNDING AT THE HYPOTHETICAL RATE OF 6%. (PLEASE NOTE THAT WE ARE SELECTING 6% TO ILLUSTRATE THE EFFECT OF TAXATION ON GROWTH ONLY. ACTUAL INTEREST EARNINGS OF FIXED ANNUITIES OR OTHER INVESTMENTS COULD BE LOWER OR HIGHER THEN THIS RATE.)
WITH TAXES BEING PAID EACH YEAR THE CURRENTLY TAXED SUM WOULD GROW TO $76,322 AFTER 10 YEARS. BUT IF THE TAXES ARE DEFERRED THE EFFECT OF COMPOUNDING IS MORE PRONOUNCED SO THE TOTAL AT THE END OF 10 YEARS IS $89,542. EVEN IF ALL OF THE TAXES WERE PAID AT THIS TIME, $78,470 WOULD REMAIN. THE NET EFFECT IS THAT AFTER TAXES OVER $2,000 MORE IS LEFT WHEN INCOME TAXES WERE DEFERRED FOR 10 YEARS.
INSTEAD OF 10 YEARS LETS ASSUME THAT THE ENTIRE $89,542 SUM CONTINUES TO GROW TAX-DEFERRED FOR 20 YEARS. NOW THE TOTAL WOULD BE $160,355. IF ALL OF THE TAXES WERE PAID AT THE END OF THIS PERIOD, $129,456 WOULD REMAIN. THAT’S ALMOST $13,000 MORE THEN IF THE INCOME TAXES WERE PAID EACH YEAR.
WHAT IF THE TAXES WERE DEFERRED FOR A TOTAL OF 30 YEARS? THE ORIGINAL SUM OF $50,000 WOULD HAVE GROWN TO $287,175. EVEN AFTER PAYING ALL OF THE INCOME TAX ON THIS GAIN, THERE WOULD STILL BE A TOTAL OF $220,765 DOLLARS REMAINING. CONTRAST THIS TO THE $177,830 THAT IS LEFT WHEN TAXES ARE PAID EACH YEAR. OVER THIRTY YEARS, TAX DEFERRAL GENERATES ALMOST $43,000 MORE AFTER ALL OF THE INCOME TAXES ARE PAID!
REMEMBER, WITH AN ANNUITY YOU PAY THE INCOME TAX ON YOUR INTEREST EARNINGS ONLY WHEN YOU CHOOSE TO ACCESS YOUR SAVINGS. SO YOU HAVE THE ADVANTAGE OF CONTROLLING WHEN THE TAXES WILL BE PAID.
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Tax Deferred Fixed Annuities www.legacyannuities.com
BUT THERE IS ANOTHER POTENTIAL ADVANTAGE WITH ANNUITIES AS WELL. INSTEAD OF WITHDRAWING THE MONEY THAT YOU HAVE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS. ONE SUCH OPTION WOULD GUARANTEE A MONTHLY INCOME FOR AS LONG AS YOU LIVE. UNDER THIS OPTION YOUR MONTHLY INCOME WOULD BE CALCULATED BASED ON THE ENTIRE AMOUNT ACCUMULATED IN YOUR ANNUITY BEFORE ANY INCOME TAX IS PAID. UNDER CURRENT TAX LAW A PORTION OF EACH PAYMENT WOULD BE CONSIDERED TAXABLE INCOME WHILE THE REMAINING PORTION WOULD GENERALLY BE CONSIDERED A NONTAXABLE RETURN OF COST.
THE FAVORABLE TAX TREATMENT OF ANNUITIES CAN ALLOW FUNDS TO ACCUMULATE OVER THE YEARS WITHOUT BEING ERODED ANNUALLY BY CURRENT TAXES. THEN THESE FUNDS COULD BE USED TO PROVIDE A RETIREMENT INCOME GUARANTEED TO LAST FOR THE REST OF THE OWNERS LIFE… WITH A PORTION OF THAT INCOME BEING NONTAXABLE.
BUT THERE IS ANOTHER POTENTIAL ADVANTAGE WITH ANNUITIES AS WELL. INSTEAD OF WITHDRAWING THE MONEY THAT YOU HAVE ACCUMULATED IN YOUR ANNUITY ALL AT ONCE, YOU COULD SELECT FROM A VARIETY OF RETIREMENT INCOME OPTIONS. ONE SUCH OPTION WOULD GUARANTEE A MONTHLY INCOME FOR AS LONG AS YOU LIVE. UNDER THIS OPTION YOUR MONTHLY INCOME WOULD BE CALCULATED BASED ON THE ENTIRE AMOUNT ACCUMULATED IN YOUR ANNUITY BEFORE ANY INCOME TAX IS PAID. UNDER CURRENT TAX LAW A PORTION OF EACH PAYMENT WOULD BE CONSIDERED TAXABLE INCOME WHILE THE REMAINING PORTION WOULD GENERALLY BE CONSIDERED A NONTAXABLE RETURN OF COST.
THE FAVORABLE TAX TREATMENT OF ANNUITIES CAN ALLOW FUNDS TO ACCUMULATE OVER THE YEARS WITHOUT BEING ERODED ANNUALLY BY CURRENT TAXES. THEN THESE FUNDS COULD BE USED TO PROVIDE A RETIREMENT INCOME GUARANTEED TO LAST FOR THE REST OF THE OWNERS LIFE… WITH A PORTION OF THAT INCOME BEING NONTAXABLE.
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AND CONSIDER THAT LEFT IN THE ANNUITY, EARNINGS WILL NOT AFFECT TAXATION OF SOCIAL SECURITY INCOME. FOR SOME THIS CAN MEAN THAT EACH YEAR’S INCOME TAX BILL WILL BE LOWER BECAUSE THE TAXES ON THE ANNUITY’S EARNINGS ARE DEFERRED AS THEY ACCUMULATE… AND THE TAX BILL COULD BE LOWER STILL BECAUSE AS THE ANNUITY’S EARNINGS ACCUMULATE THEY ARE NOT CONSIDERED WHEN DETERMINING IF THE TAXPAYER’S INCOME IS HIGH ENOUGH TO TRIGGER THE INCLUSION OF A PORTION OF SOCIAL SECURITY AS ADDITIONAL TAXABLE INCOME.
ANNUITIES CAN ALSO PROVIDE ADVANTAGES WHEN IT COMES TO SETTLING THE OWNERS ESTATE. WHEN LEFT TO YOUR NAMED BENEFICIARY ANNUITIES AUTOMATICALLY AVOID…
THE EXPENSE
THE DELAYS AND…
INFLEXIBILITY OF PROBATE. BYPASSING PROBATE CAN BE WELCOME RELIEF FOR FAMILY MEMBERS WHO OTHERWISE MIGHT HAVE TO STRUGGLE WITH COURTS AND ATTORNEYS BEFORE THEY RECEIVE THEIR INHERITANCE.
FIXED ANNUITIES OFFER MANY ADVANTAGES.
• THEY ARE FREE FROM MARKET RISK.
ANNUITIES CAN ALSO PROVIDE ADVANTAGES WHEN IT COMES TO SETTLING THE OWNERS ESTATE. WHEN LEFT TO YOUR NAMED BENEFICIARY ANNUITIES AUTOMATICALLY AVOID…
THE EXPENSE
THE DELAYS AND…
INFLEXIBILITY OF PROBATE. BYPASSING PROBATE CAN BE WELCOME RELIEF FOR FAMILY MEMBERS WHO OTHERWISE MIGHT HAVE TO STRUGGLE WITH COURTS AND ATTORNEYS BEFORE THEY RECEIVE THEIR INHERITANCE.
FIXED ANNUITIES OFFER MANY ADVANTAGES.
• THEY ARE FREE FROM MARKET RISK.
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• WITH FIXED ANNUITIES YOUR PRINCIPAL IS GUARANTEED.
• THERE IS A MINIMUM INTEREST GUARANTEE.
• INCOME TAXES ON EARNINGS ARE DEFERRED AS LONG AS THEY REMAIN IN THE ANNUITY.
• ANNUITIES OFFER A GUARANTEED LIFETIME INCOME OPTION.
• AMOUNTS DISTRIBUTED AT DEATH BYPASS PROBATE WHEN LEFT TO YOUR NAMED BENEFICIARY.
• AND, AS EARNINGS ACCUMULATE WITHIN YOUR ANNUITY THERE IS NO AFFECT ON THE TAXATION OF SOCIAL SECURITY INCOME.
• THERE IS A MINIMUM INTEREST GUARANTEE.
• INCOME TAXES ON EARNINGS ARE DEFERRED AS LONG AS THEY REMAIN IN THE ANNUITY.
• ANNUITIES OFFER A GUARANTEED LIFETIME INCOME OPTION.
• AMOUNTS DISTRIBUTED AT DEATH BYPASS PROBATE WHEN LEFT TO YOUR NAMED BENEFICIARY.
• AND, AS EARNINGS ACCUMULATE WITHIN YOUR ANNUITY THERE IS NO AFFECT ON THE TAXATION OF SOCIAL SECURITY INCOME.
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Wednesday, November 19, 2008
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Fixed Annuities
CALACULATING THE IMPACT OF FUTURE INFLATION IS PRETTY EASY IF WE FOLLOW A FORMULA REFERRED TO AS THE RULE OF 72. TO FIND HOW LONG IT WILL TAKE PRICES OF GOODS AND SERVICES TO DOUBLE ALL WE DO IS DIVIDE THE NUMBER 72 BY THE CURRENT INFLATION RATE. FOR EXAMPLE, IF THE INFLATION RATE IS 4% THEN 72 / 4% EQUALS 18. THAT MEANS THAT IN 18 YEARS PRICES WILL DOUBLE… OR ANOTHER WAY OF LOKKING AT IT IS THAT IN 18 YEARS OUR SAVINGS IS WORTH HALF (IN TERMS OF PURCHASING POWER) OF WHAT IT IS WORTH TODAY.
IF THE INFLATION RATE AVERAGED 2% THEN IT WOULD TAKE 36 YEARS FOR PRICES TO DOUBLE. AT A 10% INFLATION RATE PRICES DOUBLE IN ONLY A LITTLE MORE THAN 7 YEARS.
NO ONE KNOWS WHAT FUTURE RATES OF INFLATION WILL BE, BUT AT ALMOST ANY LEVEL INFLATION MEANS A POTENTIAL PROBLEM.
PEOPLE CONCERNED WITH INFLATION OFTEN TURN TO THE EQUITY MARKETS. THEY VIEW THE HISTORICAL STEADY CLIMB OF EQUITIES AS A WAY TO HELP COMBAT THE EFFECTS OF INFLATION. HOWEVER… WHILE PAST PERFORMANCE OF THE STOCK MARKET IN GENERAL MIGHT BE IMPRESSIVE, THERE ARE NO GUARANTEES REGARDING FUTURE PERFORMANCE.
EVEN POWERFUL LONG-TERM UPWARD TRENDS ARE USUALLY MADE UP OF A SERIES OF SHORTER-TERM UPS AND DOWNS.
THE VOLATILITY OF EQUITIES HAS CAUSED EVEN THE MOST EXPERIENCED INVESTORS TO SUFFER THROUGH MANY SLEEPLESS NIGHTS.
Fixed Annuities
CALACULATING THE IMPACT OF FUTURE INFLATION IS PRETTY EASY IF WE FOLLOW A FORMULA REFERRED TO AS THE RULE OF 72. TO FIND HOW LONG IT WILL TAKE PRICES OF GOODS AND SERVICES TO DOUBLE ALL WE DO IS DIVIDE THE NUMBER 72 BY THE CURRENT INFLATION RATE. FOR EXAMPLE, IF THE INFLATION RATE IS 4% THEN 72 / 4% EQUALS 18. THAT MEANS THAT IN 18 YEARS PRICES WILL DOUBLE… OR ANOTHER WAY OF LOKKING AT IT IS THAT IN 18 YEARS OUR SAVINGS IS WORTH HALF (IN TERMS OF PURCHASING POWER) OF WHAT IT IS WORTH TODAY.
IF THE INFLATION RATE AVERAGED 2% THEN IT WOULD TAKE 36 YEARS FOR PRICES TO DOUBLE. AT A 10% INFLATION RATE PRICES DOUBLE IN ONLY A LITTLE MORE THAN 7 YEARS.
NO ONE KNOWS WHAT FUTURE RATES OF INFLATION WILL BE, BUT AT ALMOST ANY LEVEL INFLATION MEANS A POTENTIAL PROBLEM.
PEOPLE CONCERNED WITH INFLATION OFTEN TURN TO THE EQUITY MARKETS. THEY VIEW THE HISTORICAL STEADY CLIMB OF EQUITIES AS A WAY TO HELP COMBAT THE EFFECTS OF INFLATION. HOWEVER… WHILE PAST PERFORMANCE OF THE STOCK MARKET IN GENERAL MIGHT BE IMPRESSIVE, THERE ARE NO GUARANTEES REGARDING FUTURE PERFORMANCE.
EVEN POWERFUL LONG-TERM UPWARD TRENDS ARE USUALLY MADE UP OF A SERIES OF SHORTER-TERM UPS AND DOWNS.
THE VOLATILITY OF EQUITIES HAS CAUSED EVEN THE MOST EXPERIENCED INVESTORS TO SUFFER THROUGH MANY SLEEPLESS NIGHTS.
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TAX DEFERRED-FIXED ANNUITIES
IN SPITE OF WHAT WE SEE ON THE NEWS EVERY DAY THERE ARE REASONS TO BE OPTIMISTIC ABOUT THE FUTURE. PEOPLE ARE LIVING LONGER AND HEALTHY LIVES. AND ENJOYING THEMSELVES LONG AFTER THEY RETIRE. BUT TO REALIZE THE PROMISE OF THE FUTURE ONE MUST ALSO CONSIDER ITS CHALLENGES. WHAT ARE THE CHALLENGES THAT WE MUST BE PREPARED TO FACE IN THE FUTURE?
THERE IS THE CHALLENGE OF INFLATION.
THE CHALLENGE OF A VOLATILE INVESTMENTS AND SAVINGS ACCOUNTS. AS WE HAVE SEEN IN RECENT YEARS… INTEREST RATES CAN GO UP AND DOWN AND THE STOCK MARKET CAN GO UP AND DOWN.
THERE IS THE CHALLENGE OF TAXATION. I AM TALKING ABOUT NOT JUST INCOME TAXES, BUT CAPITAL GAINS TAX, TAX ON SOCIAL SECURITY INCOME AND ESTATE TAXES AS WELL.
THESE ARE ALL CHALLENGES THAT YOU HAVE PROBABLY THOUGHT ABOUT FROM TIME TO TIME. BUT THERE IS ONE ADDITIONAL CHALLENGE THAT I FIND THAT MANY PEOPLE DON’T REALLY PAY MUCH ATTENTION TO AND THAT IS THE CHALLENGE OF THE POTENTIAL THAT IF WE LIVE LONG ENOUGH WE MIGHT OUTLIVING OUR INCOME.
OVER THE NEXT FEW MINUTES I AM GOING TO TALK NOT ONLY ABOUT THESE CHALLENGES… I AM GOING TO TALK ABOUT A POSSIBLE SOLUTION AS WELL.
FIRST, LET’S TALK A LITTLE MORE ABOUT INFLATION. THIS SLIDE SHOWS THE PRICES FOR MANY OF THE THINGS WE ALL BY AS THEY WERE IN 1963 AND THEN WHAT THEY HAD INCREASED TO BY THE YEAR 2000.
THE CONCERN THAT WE ALL MUST SHARE IS… WILL OUR INCOME KEEP PACE WITH ANY POTENTIAL INCREASES IN FUTURE COSTS OF LIVING?
IF IT DOESN’T, THEN WE WILL BE FORCED TO DEAL WITH SOME VERY MAJOR PROBLEMS. FOR EXAMPLE, AT 4% INFLATION, THE PURCHASING POWER OF $100,000 ERODES TO JUST $30,000 OVER A PERIOD OF 35 YEARS. THAT WOULD MEAN THAT OUR SAVINGS WOULD ONLY BUY ABOUT ONE THIRD OF IT WOULD TODAY!
Fixed Annuities
TAX DEFERRED-FIXED ANNUITIES
IN SPITE OF WHAT WE SEE ON THE NEWS EVERY DAY THERE ARE REASONS TO BE OPTIMISTIC ABOUT THE FUTURE. PEOPLE ARE LIVING LONGER AND HEALTHY LIVES. AND ENJOYING THEMSELVES LONG AFTER THEY RETIRE. BUT TO REALIZE THE PROMISE OF THE FUTURE ONE MUST ALSO CONSIDER ITS CHALLENGES. WHAT ARE THE CHALLENGES THAT WE MUST BE PREPARED TO FACE IN THE FUTURE?
THERE IS THE CHALLENGE OF INFLATION.
THE CHALLENGE OF A VOLATILE INVESTMENTS AND SAVINGS ACCOUNTS. AS WE HAVE SEEN IN RECENT YEARS… INTEREST RATES CAN GO UP AND DOWN AND THE STOCK MARKET CAN GO UP AND DOWN.
THERE IS THE CHALLENGE OF TAXATION. I AM TALKING ABOUT NOT JUST INCOME TAXES, BUT CAPITAL GAINS TAX, TAX ON SOCIAL SECURITY INCOME AND ESTATE TAXES AS WELL.
THESE ARE ALL CHALLENGES THAT YOU HAVE PROBABLY THOUGHT ABOUT FROM TIME TO TIME. BUT THERE IS ONE ADDITIONAL CHALLENGE THAT I FIND THAT MANY PEOPLE DON’T REALLY PAY MUCH ATTENTION TO AND THAT IS THE CHALLENGE OF THE POTENTIAL THAT IF WE LIVE LONG ENOUGH WE MIGHT OUTLIVING OUR INCOME.
OVER THE NEXT FEW MINUTES I AM GOING TO TALK NOT ONLY ABOUT THESE CHALLENGES… I AM GOING TO TALK ABOUT A POSSIBLE SOLUTION AS WELL.
FIRST, LET’S TALK A LITTLE MORE ABOUT INFLATION. THIS SLIDE SHOWS THE PRICES FOR MANY OF THE THINGS WE ALL BY AS THEY WERE IN 1963 AND THEN WHAT THEY HAD INCREASED TO BY THE YEAR 2000.
THE CONCERN THAT WE ALL MUST SHARE IS… WILL OUR INCOME KEEP PACE WITH ANY POTENTIAL INCREASES IN FUTURE COSTS OF LIVING?
IF IT DOESN’T, THEN WE WILL BE FORCED TO DEAL WITH SOME VERY MAJOR PROBLEMS. FOR EXAMPLE, AT 4% INFLATION, THE PURCHASING POWER OF $100,000 ERODES TO JUST $30,000 OVER A PERIOD OF 35 YEARS. THAT WOULD MEAN THAT OUR SAVINGS WOULD ONLY BUY ABOUT ONE THIRD OF IT WOULD TODAY!
Fixed Annuities
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