Could an annuity help you enjoy your retirement?
Hurricane Sandy devastated the Atlantic Seaboard, the national election has come and gone, but your money is still safe and sound.
Think of the simplicity the annuity brings to your life. No fees, no loads, no market risk. You have a product that will fund Baby Boomer retirement. It isn’t stocks. It isn’t bonds. Nor is it mutual funds. It’s Fixed Indexed Annuities.
What are the issues confronting the U.S. at this time? The answer is multi-level but can be summed up as:
1) The collapse of an economy (potential)
So what keeps these annuities safe? Remember, these are not investments; they are deposit accounts backed up by cash on hand, i.e., insurance companies must have the money to compensate the annuity holder if they go out of business. This is required by state law (The State Guarantee Fund). Furthermore, the insurance company doesn’t borrow money to make investments, is not expected to make payouts right away, and doesn’t make risky and speculative investments. How many of you are worried about your homeowners, auto, and life insurance company going under? Why is the annuity treated any differently?
It is all the same insurance industry. Remember that the insurance industry was the last man standing during the Great Depression when banks and investment firms went south. Then as of now, the sector remains the last bastion of financial freedom.
Safety is not an issue with fixed annuities. Their cash flow originates with the general portfolio. 100% of all annuity funds must be backed up with 100% available assets. In other words, the appointed annuity company already has its portfolio to back the contractual guarantees.
Conversely, investments base their account values on subaccounts consisting of stocks, bonds, and mutual funds. These kinds of accounts generate risk and fees.
Annuities provide economic security that can’t be duplicated by other investments like stocks, bonds, CDs, etc. Why? Because annuities relieve the consumer of the need to set aside additional sums of money to offset risk and fees for managing the account.
So if fear of management of your retirement accounts paralyzes you and causes you stress, simply pass it to a risk bearer, an insurance company, and let the annuity provide you with a safe and secure income.