Annuities / Long-Term Care Insurance
According to the Health Insurance Association of America, approximately 50% of all people over 65 will spend some time in a nursing home during their lifetime. The average annual cost of nursing home care for one person is more than $50,000. Medicare pays for less than 2% of all long-term care cases - including nursing home care, assisted living and custodial care - for a maximum of only 100 days. Medicaid pays for long-term care only after an individual has spent his or her entire estate, qualifies as impoverished and is admitted into a nursing home that accepts Medicaid.
Fortunately, there is a solution to assist in paying for this expense without wiping out your life savings and your legacy - long-term care insurance. If you haven't planned for long-term care, you may be at risk for losing everything you've worked for throughout your lifetime.
In addition to protecting your assets, long-term care insurance can help you maintain your independence. The right policy will provide you with a wide range of choices, such as how and where you and your family want to receive care. It can prevent total dependence on your children and other family members - both physically and financially.
Take steps now to protect your hard-earned assets and your independence in the future. Contact Matt and Mike today for more information about making long-term care insurance part of your comprehensive investment plan.
Annuities can provide individuals and families with the security of knowing their money is growing tax free and may provide a cushion in retirement. However, the complexity of annuities and the options are overwhelming. Matt and Mike are proficient in understanding the benefits and pitfalls of different annuity options. They will work with you to identify annuity products that best meet your unique needs.
Some general benefits of annuities include:
- Tax control
Earnings in annuities are not taxed until withdrawn.1 Annuities also allow you to reallocate your investment portfolio to adjust to market conditions without taxable consequences. - Multiple investment options
In addition to stock portfolios, variable annuities also offer fixed interest rate, money market and bond sub-accounts to help provide a balanced portfolio. - Income protection*
Some annuities guarantee a minimum level of income in the future, regardless of market performance.2 - Family protection*
Most annuities guarantee your heirs at least your original investment (less withdrawals). Some guarantee a minimum rate of return (generally 3% to 7%). Others offer additional protection to surviving spouses by allowing them to continue the contract at the higher value of the death benefit amount or cash value, without incurring taxes or penalties.
To learn more about annuities, and other, more secure investment alternatives, please Mike and Matt today.
You should consider the investment objectives, risks, and charges and expenses of variable annuities carefully before investing. The prospectus contains this and other important information. Prospectus for both the variable annuity contract and the underlying funds are available from our office. You should read the prospectus carefully before investing.
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1Variable annuities are long-term investment alternatives designed for retirement purposes. Withdrawals of taxable amounts are subject to income tax and if made before age 59½, may be subject to a 10% federal tax penalty. Withdrawals from annuities will affect both the cash value and the death benefit.
2Guarantees are based on the claims-paying ability of the issuer.
*The selection of these features and benefits may result in higher variable annuity charges such as higher mortality and expense charges or higher surrender charges and longer surrender periods.
A fixed annuity can help meet the long-term financial goals of many different people. A fixed annuity may be a wise choice for someone who:
- Is interested in lowering their current tax bill through tax-deferred investments.
- Has savings that may fall short of providing a comfortable standard of living in retirement.
- Likes the idea of ensuring an income that may continue as long as they may live.
What is a fixed annuity?
A fixed annuity is a type of annuity that provides a guaranteed fixed rate of return during the accumulation phase (during which the owner of a fixed annuity makes payments into the contracts and accumulates assets) and a fixed benefit payable upon annuitization (which involves the conversion of the accumulated value into a stream of income for either one or more lives or specified period of time).
When you purchase a fixed annuity, you enter into a contract with a life insurance company - you agree to pay the premium (the "price" of your annuity) and the company agrees to provide benefits that include:
- A guaranteed return of your principal. Nearly all insurers guarantee that you will never get back less than what you have paid.*
- Tax-deferred interest. Interest rates are for periods of up to 10 years, and you pay no taxes on interest earned until it is withdrawn. Withdrawals are subject to taxes prior to age 59 ½ and may incur a 10% federal tax penalty.
For additional information about how a fixed annuity can help with your long-term planning, please contact Matt and Mike today.
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*Guarantees are based on claims paying ability of the insurer.
If you're seeking to secure your financial future beyond your working years, you have many options for saving and investing your money. But when it comes to long-term planning, certain investments let you save on a tax-deferred basis.
Combine tax deferral with the long-term growth potential inherent in stock and bond investments and you have an alternative that can help you build the retirement assets you'll need - a variable annuity.
Variable annuities offer a combination of tax-advantaged growth opportunities and protection including:
- Tax deferral.You pay no current income tax on earnings or other taxable amounts until you make a withdrawal. At that time, it's important to be aware that withdrawals of taxable amounts are subject to income tax and, if taken prior to age 59 1/2, a 10% federal tax penalty may apply. Withdrawals from annuities will affect both the cash value and the death benefit1
- Potential for long-term growth of your money.You're able to invest in professionally managed investment portfolios.
- Valuable guarantees. 2These include protection for beneficiaries and choices for income you cannot outlive. The selection of protection features may result in higher variable annuity charges such as higher mortality and expense charges, or higher surrender charges and longer surrender periods.
What is a Variable Annuity?
A variable annunity is a contract between you - the annuity owner - and a life insurance company. In return for your purchase payment, the insurance company agrees to provide either a regular stream of income or a lump-sum payout at some future time, generally when you retire.
How Does it Work?
A variable annuity has an accumulation phase and an income phase. The accumulation phase begins as soon as you invest. Your purchase payment(s) can be invested in the securities portfolios and fixed-interest options that are available in your contract. Unlike a mutual fund, where interest, dividends and/ or capital gains are taxed each year, any growth in an annuity accumulates on a tax-deferred basis. Of course, your investment can also lose value, since both investment return and principal value will fluctuate in response to changing market conditions.
When you are ready to take distributions, typically at retirement, you can choose to have your principal and interest paid out in the form of income payments - called annuitization - or you can take systematic withdrawals or receive a lump sum payout.
To learn more about the role variable annuities can play in your retirement planning, please contact Matt and Mike today.
You should consider the investment objectives, risks, and charges and expenses of variable annuities carefully before investing. Each variable annuity's prospectus contains this and other information about the variable annuity and is available from our office. You should read it carefully before investing.
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1Tax-qualified contracts such as IRAs, 401(k)s and others are tax-deferred regardless of whether they are funded with an annuity. However, annuities do provide other features and benefits including, but not limited to, a guaranteed death benefit (based on the claims-paying ability of the issuer) and income choices, for which a mortality and expense risk is charged. Both investment return and principal value will fluctuate in response to changing market conditions.
2Guarantees are based on the claims-paying ability of the issuer.
No investment product is for everyone, and that is true of annuities. Annuities are long-term investments alternatives designed for retirement purposes. Since most annuities impose a penalty if you withdraw more than the free withdrawal amount before the end of the surrender period, they should be entered into with a long-term perspective.1
In general, investors should always consider contributing the maximum allowable to their qualified plans before investing in annuities. In addition to the tax deferral available in qualified plans, variable annuities have many special features to help you safeguard wealth and distribute income.
The annuity offers a way to invest in a wide variety of portfolios with different degrees of risk and return, giving you upside potential and diversity among asset classes. It can help you manage your income taxes and guarantee a stream of payments during retirement.2
To learn more about annuities and to see if this investment alternative may be right for you, please contact Matt and Mike today.
You should consider the investment objectives, risks, and charges and expenses of variable annuities carefully before investing. Each variable annuity's prospectus contains this and other information about the variable annuity and is available from our office. You should read it carefully before investing.
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1Withdrawals of the taxable amounts are subject to income tax and if made before age 59½, may be subject to a 10% federal tax penalty. Withdrawals from annuities will affect both the cash value and the death benefit.
2Guarantees are based on the claims-paying ability of the issuer. Both investment return and principal value will fluctuate in response to changing market conditions.
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