Annuities

Annuities are an integral part of retirement planning, allowing you to save money and taxes while eliminating the fear of outliving your savings.  There is a wide variety of annuities, some tailored for future growth, some for income and others as savings instruments. Based on your personal needs, you can select the product(s) best suited for you depending on your exact needs.


There are two basic types of annuities: an immediate annuity and a tax-deferred annuity.   Immediate annuities are designed to provide you or a loved one with regular income payments for life or a set period of time only. This kind of arrangement is well suited for those who want an income with flexible options. Immediate annuity contributions are usually a lump sum of money. Based on your age, life expectancy and interest rates, the insurance company calculates how much they send each month - no matter how long you live.

Contributions to tax deferred annuities are typically a lump some of money given to the insurance company and it grows on a tax-deferred basis.  You don't pay any taxes on the earning or profits that are built up in the annuity until you take out the money. You may also add money to your tax-deferred annuity in various amounts over time, providing you with more flexibility.

For detailed information on each type of annuity available, or for direct service, rate requests or a detailed analysis of the program best suited to meet your financial objectives, contact The McDonald Group.
Fixed Annuities (Fixed Rate Annuity)
A fixed annuity, also called fixed rate annuity is a product offered by insurance companies that guarantees fixed payments throughout the life of the annuity.  The risk is taken by the insurer, not the insured. 

With a fixed annuities contract, you contribute money (either installments or a lump sum), into the annuity. Your accumulated contribution is in low-risk assets. The amount of your contribution yields a relatively stable fixed rate of return. Additional features that could potentially further improve earnings from your annuity are available, and should be discussed with your professional.


Equity Indexed Annuities
In the mid-1990's, insurance companies created Equity Indexed Annuities.  The index annuity rate of return is generally a set percentage of the increase on a particular stock-market index (S&P 500, NASDAQ, and DOW) shown in a given year. Equity indexed annuities provide a guarantee on the downside. For individuals who do not want to take any downside risk; an equity indexed annuity is one of the best options available today. Equity Indexed Annuities are appealing to many because while your principal is protected and guaranteed from losses in the equity market, gains are added to the annuity's return. Equity Indexed Annuities may be subject to surrender charges during surrender period. Gains may be subject to caps, participation rates, or spreads if applicable.

For more information on selecting the annuity that is right for you, determining if you qualify, or to request a free no-obligation consultation from one of our experienced financial advisors, contact The McDonald Group.