01/31/2022
Benefits of Indexed Tax Deferred Annuities
You are NOT investing in the stock market! Your funds are invested in the general bond portfolio of the insurance company and any gain is provided by the use of option futures between the insurance company and Wall Street.
1. Tax Deferred Growth. The interest earned is not taxed until it is withdrawn. Your funds grow tax deferred. (no tax until touched, tax liability controlled by owner)
2. Safety. Annuities are among the most guaranteed and safe investments available, due to (state required reserve accounts.) To my knowledge there have never been losses due to insurance company failures.
3. Avoids Probate. Annuities transfer to a beneficiary without the need for probate. (no fees direct to the beneficiary) and keeps these assets from public knowledge.
4. Income. Annuities can change from an accumulation vehicle to an income vehicle. Annuities can provide an income that cannot be outlived. (safe secure recurring income)
5. Estate Planning. Annuities are used in estate planning to help protect assets in the event of a long-term care situation. Many annuities provide full access to the accumulation value if the owner is unable to perform 2 of 6 activities of daily living. No surrender charges usually.
6. Interest Income. Annual Interest or a withdrawal is available for income any time after the first year. Usually limited to 10% of accumulation. The interest can be withdrawn monthly, annually or quarterly. Interest is determined by a guaranteed account and or an index ie S&P 500.
7. Death Benefit. Your beneficiary always receives the full account value from the annuity immediately without penalty. (and without need for probate)
8. No Fees. No contract fees or sales commissions. 100% of your money is working.
9. Comparison. Interest rate on annuities is usually higher than bank CD's, Treasury Notes and Bonds or other fully guaranteed products. (historically for 90 plus years)
10. Access. Unlike bank CD's, you have access to your funds during the interest earning time period. You don’t have to wait until maturity to make a withdrawal.
11. Principal and Interest are locked in every year, the value can never be reduced due to market downturns.
12. Triple Compounding, If some of your savings are placed in an annuity, the benefit of tax deferral provides for: • Interest on your principal • Interest on your interest and • Interest on your tax savings…because your interest is free from current income tax in an annuity, it can all continue to compound instead of being withdrawn for tax payments. When taken as income most of the income is tax-free in a non-qualified annuity. SEE BACK>
Disadvantages of Tax Deferred Annuities
1. Penalty for early withdrawal. In the first 5,7,10 years if you withdraw more than the contract allows, a penalty is imposed. This penalty can be avoided by using the contract as an income (pension payout) or death. You can always withdraw 10% of the account value annually without penalty. (if you don't allow the insurance company to hold your money, you cannot enjoy these benefits listed)
2. Early Access: Any access to funds in a tax deferred annuity before age 59 ½ can be subject to a tax penalty of 10% by the Federal Government.
IF THIS SOUNDS GOOD TO YOU CALL ME!
478.960.5185
MICHAEL A. HOWARD, CLUSince 1975
“Dedicated To Safely Growing And Protecting Your Money”
2607 Vineville Ave. Suite 204 Box 14 Macon, Georgia 31204
Phone: 478.960.5185 Fax: 866.806.4608 Email: [email protected]
Website: themikehowardgroup.com
