IE Group LLC  office

 

of Arthur Harris,

The best in Life, Health and Retirement

Text Box: Annuities

Most annuities are very similar in structure. Originally most annuities had a fixed amount of growth for a period of time. Many policies are like this today. Some of these are called multiyear guarantee annuities. That means that over period of time these annuities will grow at a fixed rate. There is two types of money that can go into an annuity, qualified money, and non-qualified money.  This money will be placed in a qualified annuity or a nonqualified annuity respectively. Annuities that are IRAs, SEP IRAs  or any IRA equivalent including a 529 plan are all filled with qualified money. That means you will not pay taxes on this money or is growth until it’s distribution . Most other types of annuities require that you pay taxes on the money that goes into this annuity. This also includes a Roth IRA.  You will not pay taxes on the growth until it is distributed, except with a Roth Ira.  Most annuities have what is called a surrender period.  This is a time where money that has been placed in an annuity cannot be removed without a special charge. Most insurance companies will waive that surrender charge if 10% or less of the annuity money is taken per year..

Product Summary

Single Premium Immediate Annuity or SPIA allows for a specific payout period starting from the moment of transfer into this account.  This is used when a prolonged income has to begin for whatever reason and will continue upon one of many options including five-year period certain

10 year period certain, 20 year period certain and Life.  This can transfer to more than one life.

 

Single Premium Deferred Annuity this is an annuity that is bought or transferred with a single premium payment and is not distributed until some future event.

 

There is no limitation as to the number of annuities one can have in fact you can use one portion of an annuity to gather the benefits of a deferred annuity.  

 

For the most part the best annuities are the simplest to understand. Anything that has everything to do with annuities is how the insurance company makes money on the deal. This is been broken down several ways

· Participation rate. This is how much growth in an index that you will be able to share. If you have 50% participation rate and the market climbs 20% you will only realize half of that growth.  The rest is shared with the insurance company.

· Caps are limitations to the amount of growth the insurance company will allow. For example, if you have a 2% In a month if the actual market climbs 10% you will only see 2% of it. The insurance company gets the rest.

· And you will guaranteed rate. Usually used for a multiyear guarantee. If the insurance company is offering 3% they have bonds that are making at least 5%.

 

Regardless of what’s going on with the stock market index annuities are a safe option.

To contact us:

Phone: 866-986-9933 ext.1

Fax: 626-609-2022

E-mail: financial_planner@great-insurance.org

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 Roth  Unqualified Annuity

 529 education      401K

  Fixed annuity         EIA   

 

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