Five Facts about Annuities

Making decisions about money usually is not fun unless you are deciding how to spend it. During a lifetime of earning money, it at least seems pretty straightforward: the paychecks come in; we pay our expenses; and we save whatever is leftover. It is not too difficult to set up a retirement savings accounts, either, but when it actually comes time to make decisions about how best to invest and spend that saved money, the complexity of options can be paralyzing.

At Everest, we work with insurance products called fixed index annuities. There are five basic things you need to know about them and why they work for so many retirees.

  1. You will not lose the money you put into buying the annuity. When you invest in the stock market, if stocks go down, you will lose money—if they go down below your purchase price, you will have even more money than you started with. Fixed index annuities provide a safeguard against so that you will never have less money than your principal investment.
  2. The money you put into an annuity is available to you. Many people assume that even if they will not lose the money they initially put in, they still will not have access to it when they need it. With annuities, this is simply untrue. Nearly all annuities allow individuals to withdraw 10% per year without penalties for a certain number of years, after which, there is no penalty and no maximum withdrawal. The money is always yours.
  3. Fixed index annuities are a safe bet. Since their inception in 1995, fixed index annuities have outperformed many other investment tools, including corporate and government bonds, mutual funds and money markets. These insurance policies are not just safe—they are smart!
  4. Income earned on fixed index annuities is tax-deferred. That’s right—not only do these annuities outperform, you do not pay taxes on your earnings until you withdraw funds from the policy. With annuities, you get the benefit of higher earnings and you can earn faster because you are not removing money from the policy to pay taxes.
  5. Annuities are protected. Fixed index annuities are backed by large insurance companies that sells the policies.

The stock market certainly cannot make these claims, so what are you waiting for? Call Everest today to see if fixed index annuities are right for you.