Idiot Proof Investing – Annuities and Life Insurance

If you are one of the many people that invest in a 401k, Ira, mutual fund, stocks and bonds for your retirement plan you may have not heard of the benefits and features of certain annuities and indexed universal life insurance. Most savings and investment products have risk and fees associated with them. Down markets and fees will eat into any future and potential gains over time. You are making someone else richer but I will show you have to diversify and take some money off of the table.

No Downside Risk:

In order to receive a high rate of return you have to be able to accept and deal with risk. Risk is very expensive. It is okay to risk money if you want to gamble in Las Vegas or Monte Carlo but why risk money you are planning to use for your retirement of for future savings.

With fixed and fixed indexed annuities as well as with whole and indexed universal life insurance there is no downside risk and no management or broker fees. More of your money will go where it is needed rather than to a brokerage or financial company. That means more money for your retirement in your later years.

Annuities:

Annuities are the only instrument in the world that can guarantee you an income for life. You have your choice of immediate, fixed, fixed indexed and variable annuities. Variable annuities have risk and fees but they still afford you the opportunity to choose and income for life.

Deferred annuities also offer you a rider which you can purchase which will allow your income amount to roll up anywhere between 5-10% a year for each year you defer taking an income stream for life. When you decided to finally take an income stream, the payment will be calculated by a few factors:

• Your age at the time of withdrawal
• The corresponding percentage based on your age
• The dollar amount as calculated by your original deposit plus the roll up percentage for each year you deferred taking income.

The longer you wait to defer and your age, the higher the monthly payment will be.

Life Insurance:

Besides variable life insurance all whole life and indexed universal life insurance policies grow risk and tax-free. When you decided to take money out of your insurance policy, you are not penalized for early withdrawal and your money will not be taxed as income because it is a policy loan.

Your cash value is not subject to the IRS 591/2 rule and the income is yours to spend when and where you want. These policies also have the death benefit associated with term policies. You can knock out two birds with one stone with these life insurance policies. Save for retirement and take care of your family should you pass away.

Make sure you consult with a knowledgeable Annuity and Life insurance broker for your retirement plan to see what you product or products works best for you and your family. These programs are for only people who want Wealth Preservation.

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