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Got an Annuity?

Michael Vitale 104 Interchange Plaza, Suite 102 Monroe Township, NJ 08831 Cell: 201.306.5988 Office: 609.655.3066 x255 Fax: 609.655.4959 Email: michael@vitaleinsurance. com Website: www.vitaleinsurance.com

ALL AROUND OLD BRIDGE Annuities...what are they and should I have one? This is a question that should come into everyone’s financial conversation. The precise timing of that conversation may be up for debate. Typically it will arise as someone is working their way through their earning years, trying to build up a “nest egg” he or she hopes will last through retirement. When you are planning out your retirement needs, and want a financial tool that can provide an additional stream of income like social security should, then an annuity should be considered as a wise option. An annuity is a contract between you and an insurance company. This contract states that after the company receives a single lump sum payment, or series of payments, from the purchaser, the annuity company will make payments for a specified period of time. The exact length of time could be a set number of years, the rest of your life, or the rest of your life plus a certain amount of years. There are generally two overall categories for Annuities – Immediate and Deferred. An Immediate Annuity is design to start issuing guaranteed pay-

ments immediately, or within a very short amount of time. They will take a lump sum payment and create a stream of income, spread out and guaranteed for the rest of your life, or a set period of time. A Deferred Annuity is a conservative way to grow a portion of your retirement savings. A lump sum or series of payments will earn interest. The interest earnings will have the income taxes deferred to a future date. The annuity itself will also have payments to the owner deferred to a later date. After an accumulation period, you can “annuitize” the contract - either take out a lump sum, or choose to receive a stream of guaranteed payments. Annuities normally have either have a fixed, variable, or an indexed rate of return. Depending on your financial or retirement goals and your risk tolerance, your licensed professional can help you choose an annuity with the proper suitability for your particular needs. A Fixed Rate of Return is as it states - a fixed interest rate is guaranteed to be credited to your principle amount each year. In a Variable Rate of Return, your principle investment ebbs and flows with the markets.

MAY 2018

Since the principle starting amount is directly invested in the market, you will feel the gains and losses. An Indexed Rate of Return is one that is credited to your principle based on a mirror of a particular index or fund. Your principle is not directly invested in the market, so you will have protection against losses in a bad market. In order to receive that protection, there are caps on how high the interest rate of return will be credited on your principle. Therefore, you can see that each type of rate of return can be suited to an individual’s specific set of needs

or goals and their risk tolerance. This has been a very broad overview of the general types of annuities available to you. A licensed professional can help you navigate the specific annuities offered by various insurance companies. While some other retirement assets may be more volatile, an annuity can be a stable part of your financial plan, which can allow you some peace of mind for your retirement or long term financial goals.

Profile for All Around Old Bridge

AAOB May 2018  

Kindergarten Student raise money for Relay of Life, Elk's Biker Rally, Chamber of Commerce Business Leader nominations, new coupons to Five...

AAOB May 2018  

Kindergarten Student raise money for Relay of Life, Elk's Biker Rally, Chamber of Commerce Business Leader nominations, new coupons to Five...

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