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Annuities

If you’ve ever worried about outliving your retirement savings, you’re not alone.

A recent study found that 67 percent of Americans indicated they would be willing to give up smaller pay increases in exchange for steady and reliable income in retirement. In the same study, 78 percent said the disappearance of pensions has made it harder to achieve the American dream.1

With pension offerings on the decline, you may want to consider a fixed income component to your financial strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed.

What is an annuity?

An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed payout options — some even for life.

Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit. However, withdrawals will reduce the contract value and the value of any protected benefits. Excess withdrawals above the restricted limit typically incur “surrender charges” within the first five to 15 years of the contract. Because annuities are designed as long-term retirement income vehicles, withdrawals made before age 59½ are subject to a 10 percent penalty fee, and all withdrawals may be subject to income taxes.

Understanding the Role of Memphis Annuities In Your Financial Planning

Planning ahead for retirement is often more complicated than people realize. While it might seem as if you should be in a good financial place, paying into Social Security and a 401(k) for years may not actually provide you with a substantial cushion. Additional guaranteed income may be of help.

With options for job pensions decreasing with each passing year, many people are looking into alternative investments that will provide them with financial stability and security as they head into their golden years. For some, Memphis annuities may pose a feasible solution.

Adding to a Retirement Strategy With Memphis Annuities

An annuity is actually an insurance policy that is meant to pay out a steady income stream over time. Individuals pay a premium for this product, after which income is dispensed on a regular basis. Income payments from Memphis annuities can be distributed on a monthly, quarterly, or annual basis; in some cases, payment can even be made in the form of a lump sum. Typically, the length of your payment period (along with other factors) will determine the size of your payment(s).

Memphis annuities can be a viable option for retirement planning because they require no annual contribution limit. Therefore, you can put a larger sum of money into this annuity for retirement — and not be taxed for it upon contribution. Your investment will compound every year and can allow you to enjoy a consistent income stream as you age. Keep in mind, however, that early withdrawals come with a penalty feed and withdrawals at any time may be subjected to income tax.

Understanding the best course of action for financial and retirement planning is no easy feat. That’s why Tennessee residents often turn to a trusted advisor who can provide recommendations for Memphis annuities and other types of investments or retirement accounts. To learn more about the valuable financial planning services we offer, please contact Servant Advisors today.

1 The National Institute on Retirement Security. “Retirement Security 2015: Roadmap for Policy Makers – Americans’ Views of the Retirement Crisis.” March 2015.

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We are an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product.

*Any references to protection benefits or steady and reliable income streams on this website refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured.

The information and opinions contained in any of the material requested from this website are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. They are given for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation.