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John Nicholson is the founder of www.The 401K Man.com, an independent insurance & financial services agency dedicated to helping others find their solutions through the myriad of choices when seeking insurance, retirement and financial advice. John's career path began with helping others in the late 1980's and early 1990's. The 401K Man is an independent agency servicing the Midwest which provides a wide variety of choices as opposed to one size fits all plan available at many of the larger financial or "brand" insurance companies & firms. We offer many solutions from basic insurance policies to comprehensive estate planning.

Saturday, February 15, 2014

Annuities

Annuities are a very important component of any future savings plans for retirement. A Fixed or Indexed Annuity can guarantee a lifetime income stream in the future with no losses.
The other great features of an annuity have to do with the fact that an annuity will always have a greater rate of return than what a bank typically will offer through a Certificate of Deposit rate.
Annuities can offer options which are called riders and these will vary by what the insurance carrier has put into the annuity contract and will offer added benefits to you.
 For far to long most of Wall St. has wanted you to invest with the chance of losing instead of having a way to have earn guaranteed income or the potential for gains without the risk.
This is where an annuity will shine it is a contract to guarantee you gains (Fixed Annuities) or ride the markets up with no chance of losses (Indexed Annuities) The downside is that you are guaranteed gains but not at the same rate that Wall St may earn.
I will explain it here, if you have an Indexed Annuity contract that guarantees 5% monthly cap rate on your investment principal, and in January the market increases  by 5%, that is good February the months average gains are 7%,  and March the market index drops by 4% you will have your principal gain in January of 5%, February gains of 5% (The other 2% goes to the insurance carrier you have a 5% cap rate) and March when the markets average plunged 4% your principal had ZERO gains and ZERO losses, ( The insurance carrier has absorbed the losses of the market swings)  Now  lets say at the end of the year if you have no losses ( A few months of ZERO gains) and a few months at 5% and a few at 3%without losses. the insurance carrier will now add all the months together and then divide by 12 months to average your rate of return.
  • If the markets drop you have no losses of your gains or your principal.( locking in gains). 
  • You will always have the potential for gains (markets goes up), tax free while in existence taxes apply when you take withdrawals. (No broker fees, trading fees, maintenance, hidden costs).
Annuities are a very important component of any future savings plans for retirement. A Fixed or Indexed Annuity can guarantee a lifetime income stream in the future with no losses.
The other great features of an annuity have to do with the fact that an annuity will always have a greater rate of return than what a bank typically will offer through a Certificate of Deposit rate.
Annuities can offer options which are called riders and these will vary by what the insurance carrier has put into the annuity contract and will offer added benefits to you.
 For far to long most of Wall St. has wanted you to invest with the chance of losing instead of having a way to have earn guaranteed income or the potential for gains without the risk.
This is where an annuity will shine it is a contract to guarantee you gains (Fixed Annuities) or ride the markets up with no chance of losses (Indexed Annuities) The downside is that you are guaranteed gains but not at the same rate that Wall St may earn.
I will explain it here, if you have an Indexed Annuity contract that guarantees 5% monthly cap rate on your investment principal, and in January the market increases  by 5%, that is good February the months average gains are 7%,  and March the market index drops by 4% you will have your principal gain in January of 5%, February gains of 5% (The other 2% goes to the insurance carrier you have a 5% cap rate) and March when the markets average plunged 4% your principal had ZERO gains and ZERO losses, ( The insurance carrier has absorbed the losses of the market swings)  Now  lets say at the end of the year if you have no losses ( A few months of ZERO gains) and a few months at 5% and a few at 3%without losses. the insurance carrier will now add all the months together and then divide by 12 months to average your rate of return.
  • If the markets drop you have no losses of your gains or your principal.( locking in gains). 
  • You will always have the potential for gains (markets goes up), tax free while in existence taxes apply when you take withdrawals. (No broker fees, trading fees, maintenance, hidden costs).

ANNUITIES,
 Facts OR Fiction?

Annuities are a greatly debated product for people considering retirement options. Many times the Wall street crowd wants someone to invest in the markets and earn commissions over and over from the investment of your hard earned retirement nest egg. Many times offering some form of Variable Annuity and sometimes choices in Mutual Funds or E.T.F.s.
A balanced portfolio is key towards having income for retirement. A Variable Annuity is NOT the investment to do it in, Fixed and Indexed Annuities are. Below are some common misconceptions with annuity products.  
Facts
  • Fixed Annuities do not lose money, Your contract guarantees in writing the set payment and amount you will recieve. If you do not understand it consult someone who does, we are available toll free at 877-775-0812 to assist with questions.
  • Indexed Annuities are correlated to the market but you are not participating in the markets the insurance carrier or Annuity provider is typically doing that for you and guaranteeing no losses of your principal and your yearly gains. 
  • Indexed Annuities provide for growth on a yearly basis but have monthly fluctuations along with the market index you may choose from along with a cap or limit on gains along with the cap or limit on losses (yearly).
We have a large group of fiduciaries, planners and specialists who can assist you providing answers which will allow you to really boost your retirement planning in these slower growth economic times, please feel free to contact us at 877-775-0812 to discuss your retirement and financial planning needs.
ANNUITY OPTIONS
 Annuity options can vary greatly from insurance company or provider to provider. Beginning choices start with the length of time, the payout of the benefit, the choice for the indexing vehicle (called a crediting method) along with more choices of benefits commonly referred to as riders which vary dramatically among the companies offering annuity products.
Since an annuity is a contract with an insurer they are offering a myriad of ways to choose benefits or options through the riders you may choose from.
 All companies that offer Annuities have a way to customize them beginning with the time frame which will be more beneficial to you the longer the time frame you agree to if you solely are looking for cash accumulation. As an added incentive to you the consumer they now have options such as Long Term Care and many other benefits to add value.  
 Since the carriers vary slightly with regard to many more terms it is impossible to keep all the information updated on our website, but a simple call to determine your goals with one of our registered representatives will certainly help you  in obtaining the answers you seek. We are available toll free at 877-775-0812 

CONTINGENT ANNUITY

Contingent Deferred Annuities are a fairly new product which can offer a lifetime income guarantee when combined with investments. Contingent Deferred Annuities are similar to a Variable Annuity but instead of funds or assets chosen by an Insurer (currently most offered through some insurance carriers) the policyholder ( with the help of his financial planner ) will choose the investment vehicle. The assets can be invested in a 401K, mutual fund account or a managed money account. This type of investment is very important currently with the low interest rate environment to help if other assets are depleted since a guaranteed income stream can be triggered if account assets are depleted. With people living much longer this is geared towards not running out of assets later in retirement. People who live beyond their life expectancy and  that run out of income will now have something to fall back upon. This is currently classified as an insurance product being an annuity but does have a fee for the guarantee. Since there are so many reserve requirements and checks and balances that insurers have to comply with it is considered a fairly safe investment. Carriers who offer this type of product are charging approximately 75 to 150 basis points. The real benefit to those who are looking for a benefit from a  C.D.A.  begins with a lower taxable rate due to this being classified typically at a  capital gains rate of 15% versus their current rate. The information provided is a general statement not to be considered tax or investment advice, for which you must contact a registered or licensed professional.

We have a large group of solutions for your retirement.Call upon our advisers, planners and fiduciaries who could help you provide services which will allow you to really boost your retirement planning in these slower growth economic times, please feel free to contact us at 877-775-0812 to discuss your retirement and financial planning needs. A Fixed Annuity is a contract with an insurance carrier for a length of time that will provide you added income to your principal. Your principal or the amount you have deposited with them will grow to a pre-agreed amount or pay out a predetermined amount over time. You have contracted with the insurance company to guarantee you a added amount to your principal without risk over a period of time. A fixed Annuity is simply that the agreement is fixed or predetermined. There are many types of Annuities on the market to accomplish different goals please feel free to read over all the pages on our site regarding Annuities and call us with any questions. We cannot provide a way to quote exactly what the Annuity value would be on the site without knowing a few more details so feel free to call and talk over your goals with one of our registered representatives at 877-775-0812. You can also use our contact tab below and submit your questions to be answered online or schedule a free consultation.

Grantor Retained Annuity Trust is a fairly new term which utilizes a portion of the Internal Revenue Tax Code allowing stocks or investment vehicles to have gains inside of a Roth I.R.A. while simultaneously going un-taxed. It is considered the most powerful and tax efficient wealth transfer tools available currently They are always for a set period of time most typically 5 or 8 years. These have been introduced to allow retirees not to completely run out of income if all assets become depleted from poor planning, exceptional planning or old age. These are also very useful if looking to pass income derived from an asset to an heir with virtually no gift tax. If you are looking for answers or solutions for your retirement call us toll free at 877-775-0812 to find out more about your alternatives to a dormant 401K or rollover solution. Always consult a tax professional or C.P.A. regarding a Grantor Retained Annuity Trust to be sure structure is properly set up in a trust, Roth 401K, or proper type account due to I.R.S. code and the gains that could be accumulated with certain investments.An Indexed Annuity is a great retirement vehicle for safe investment which could potentially grow better than a Fixed type of Annuity. Choosing the method of indexing your growth an Indexed annuities potential is parallel to the growth of the stock market indices but not in the market so if the stock markets drop you will be not suffering losses with your principal investment and gains.

The Indexed Annuity can potentially offer double digit growth tied to markets while providing safety. A little known fact of the current low interest rate environment today is the fact that 100,000 dollars with a 10 % bonus ( available with some annuities) placed in certain types of Indexed Annuities will pay more interest than one million dollars on deposit at a bank.

401(K) fixes has over a dozen fortune 500 insurance and financial institutions that we are affiliated with to provide Annuities and other related retirement and income generating products with, feel free to call toll free 877-775-0812