YOUR DEFINITIVE GUIDE TO IMMEDIATE ANNUITIES

[Pages:32]YOUR DEFINITIVE GUIDE TO

IMMEDIATE ANNUITIES

Enjoy this easy-to-read guide about the immediate annuity: an insurance contract which guarantees income for life

CONTENTS

THE BASICS..........................................................................................................4

What is an immediate annuity?...............................................................4 Why buy an immediate annuity?..............................................................5 What are the advantages of an immediate annuity?.............................7 What are the risks and disadvantages of immediate annuities?......10 Some other potential drawbacks to keep in mind:..............................11 How do immediate annuities work?......................................................12 How does an immediate annuity compare with a certificate of deposit or mutual fund?..............................................13 Who is the best candidate for an immediate annuity?.......................15

FINANCIAL DETAILS...........................................................................................16

How much does an immediate annuity cost?..........................................16 What is the rate of return on an immediate annuity?..............................18 What does the insurer do with my money?.............................................19 Can I use my IRA or 401k to pay for an immediate annuity?.................20 What are the tax implications of immediate annuities?........................21 What happens to my money if I die or if my spouse dies?........................21

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GET QUICK ANSWERS TO YOUR ANNUITY QUESTIONS: CALL 800-872-6684

CUSTOMIZING YOUR ANNUITY.........................................................................22

How do I customize my immediate annuity to fit my unique needs?......22 How much money should I put into an immediate annuity?.................23 How should I receive my annuity payments?..........................................23 Most Popular Immediate Annuity Options.....................................24-25 Are there other features I should know about?......................................26 Can an immediate annuity be part of a larger strategy?.......................27

WHEN IT'S TIME TO BUY...................................................................................28

How do I buy an annuity?........................................................................28 What sort of restrictions are there?........................................................29 Will I need a medical exam?.....................................................................29 What if I change my mind?......................................................................29

CONCLUSION.......................................................................................................30 MEET HERSH STERN...........................................................................................31 CONTACT US.......................................................................................................32

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THE BASICS

What is an immediate annuity?

An immediate annuity is an insurance product that pays you guaranteed, fixed retirement income, often for as long as you live. You pay a lump sum of money to an insurance company, called a "premium", and in exchange the insurance company pays you fixed regular income. If you choose, you can include your spouse in the annuity or even have a beneficiary if any money is left over. An immediate annuity can be compared to a life insurance policy ? only in reverse. Traditional life insurance pays out a benefit after you have died, while an immediate annuity pays a regular benefit while you are alive.

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GET QUICK ANSWERS TO YOUR ANNUITY QUESTIONS: CALL 800-872-6684

Why buy an immediate annuity?

You need to make sure your money lasts as long as you do and be confident you can maintain your lifestyle in retirement. You might be surprised to learn just how much that can cost. Preserving your current standard of living during retirement may take nearly as much income as you earned while working.

With an immediate annuity, there's no guess work of how markets will fair or if your savings will last, the income stream is guaranteed and fixed. An immediate annuity can help you meet your anticpated expenses by increasing your monthly income. This can give you the freedom and security to enjoy your retirement the way you want, whether its traveling, having more time for hobbies, or relaxing with family and friends.

HERE ARE SOME OF THE CHALLENGES AND RISKS THAT IMMEDIATE ANNUITIES WERE DESIGNED TO ADDRESS:

PEOPLE ARE LIVING LONGER

The average life expectancy continues to rise and is at a record high of 78.7 years. That's great news, but it increases the possibility that you will live longer in retirement than you anticipated and will need more money than you have saved.

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RETIREMENT SAVINGS ARE ERODING

We've been through turbulent economic times in recent years and many people have seen the value of their assets shrink due to falling house prices and stock market volatility. On top of that, the average American carries more debt than ever. Even the most carefully crafted retirement plan may need shoring up.

INFLATION

Since the government began tracking it in 1913, U.S. inflation has averaged 3.24% a year. The cumulative effect is to chip away at your buying power and make it harder for your money to last. At that rate, $100 today would be worth less than $50 in 25 years.

ESCALATING EXPENSES

The world seems more unpredictable than ever. Natural disasters, political changes and world crises can have sudden, surprising consequences causing certain expenses such as food and medical care to rise disproportionately. You'll want a margin of safety to help you ride out the unexpected.

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GET QUICK ANSWERS TO YOUR ANNUITY QUESTIONS: CALL 800-872-6684

What are the advantages of an immediate annuity?

The biggest benefit of an immediate annuity has already been highlighted but cannot be over-emphasized: peace of mind. Your annuity will provide a safe and dependable income for the rest of your life. Even if you live well past your life expectancy an annuity will keep paying you.

THERE ARE OTHER ADVANTAGES AS WELL:

ADD STABILITY TO YOUR PORTFOLIO. You may have other assets that will fluctuate in value, so it can be helpful to own an immediate annuity to even out those fluctuations. Your annuity payments are automatic and guaranteed, so you can count on them no matter what happens to other parts of your portfolio even if the stock market tumbles.

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GET QUICK ANSWERS TO YOUR ANNUITY QUESTIONS: CALL 800-872-6684

TURN ASSETS INTO AN INCOME STREAM. You may have money in low-yield savings accounts, certificates of deposit, retirement accounts, or a company-sponsored 401(k). You can use any of these funds to purchase an immediate annuity, converting them into a steady income stream you can depend on. With retirement plan assets, the annuity payments can even satisfy your required minimum distributions.

MANAGE YOUR TAX BURDEN. Consult your tax advisor for specifics about your situation, but an annuity can help limit your tax burden by spreading the gains or earned interest over your lifetime.

If you buy an annuity with nonretirement funds, you don't pay tax on the portion of each payment that is a return of your initial premium. You just pay tax on a portion of each payment: the part that is considered interest. Your taxes are spread over the duration of your annuity.

Once your premium is returned in full, all of your payments are considered interest and become taxable as income. Many people find that this helps them defer taxes until they are in a lower tax bracket.

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GET QUICK ANSWERS TO YOUR ANNUITY QUESTIONS: CALL 800-872-6684

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