Common Retirement Concern Questions

Common Retirement Questions

1. How can I protect my assets?
A. Safety
Problem: How can I increase my income without decreasing the safety of my investment?
Suitable Solution: We are all familiar with the old saying “Don’t put all your eggs in one basket.” Suitable diversification of assets in an Annuity could add to the safety of your portfolio.
B. Protection from Creditors
Problem: I am worried that a lawsuit, a bankruptcy caused by major medical bills or liens from creditors could take my lifetime savings and leave me hardly anything for my retirement years. Many financial accounts could be subject to such claims. How can I protect my lifetime savings for my own retirement income?
Suitable Solution: Annuities may offer special protection from creditors, lawsuits, bankruptcies, etc. under creditor laws in each state. Your lawyer can give you specific information about your state.
C. Bond Losses
Problem: I invested in bonds to protect my savings and receive regular interest income. I didn’t realize that when interest rates increase, the value of my bond principal would decrease.
Suitable Solution: With a bonus annuity, it may be possible to increase your principle immediately - helping you recover losses on your bond portfolio and protecting 100% of their future principal.
D. Locking in Stock Market Gains
Problem: Lately, market investments have performed well. I am concerned that the market won’t continue its upward trend forever.
Suitable Solution: To offset the effects of inflation, an annuity could offer potentially higher benefits as a result of compound interest.

2. How can I make sure my money will be available when I need it?
Liquidity Can I get some of my money out without paying penalties or charges?
Problem: Many financial accounts charge penalties for withdrawals before maturity on the entire account value. I want to be able to withdraw some money when I need it without paying excessive penalties or losing up to six month’s interest.
Suitable Solution: Annuities have many guaranteed flexible withdrawal options that may allow you to take money out of your account without paying any penalties or charges. You could receive free withdrawals that may be tailored to meet your financial situation.

3. How can I reduce my Expenses?
A. Federal Income Taxes
Problem: Interest income earned on checking accounts, savings accounts, CD’s, stock mutual funds, bond mutual funds (except for special tax-free funds), T-bills, and dividends on common stock may all be taxable by the Federal Government each year when interest is credited…even if I don’t take it out!
Suitable Solution: Interest income credited to your annuity is not currently taxable by the Federal Government. You may not pay taxes on your annuity interest income until you take it out of your annuity, but usually at lower income tax rates.
B. State Income Taxes
Problem: Interest income earned on checking accounts, savings accounts, CD’s, stock mutual funds, bond mutual funds (except for special tax-free funds), and dividends on common stock may all be taxable in most states each year when interest is credited…even if you don’t take it out!
Suitable Solution: Interest income credited to your annuity is not currently taxable by the Federal Government. You may not pay taxes on your annuity interest income until you take it out of your annuity, but usually at lower income tax rates.
C. Investment Effects on Social Security Benefits
Problem: Interest income earned and credited on most investments such as mutual funds, savings accounts, CD’s, bonds, etc. may be reportable as income which may increase my income tax on Social Security.
Suitable Solution: Interest income earned and credited on an annuity usually is not subject to either federal or state income taxes until taken out of the annuities. Such interest income is tax-sheltered and authorized by the Internal Revenue Code. When you finally take your money out of your annuity, depending upon the income option you choose, up to 85% of your monthly income may not be subject to any income taxes. Thus, fewer taxes will be paid and more of your Social Security income benefits could come through to you.
E. Charges & Fees
Problem: Many financial investments and financial accounts charge administrative, sales, or investment fees as a percentage of total assets. Often state premium taxes are passed on to me.
Suitable Solution: Subject to distribution requirements, most annuities have:

√ No sales charges,

√ No monthly administrative fees,

√ No state premium taxes passed on to your prospect, and

√ No investment fees

4. How can I protect myself against the EXTRA financial costs if I become disabled, or if I require long-term care?
Long-Term Care
Problem: I am using all of my assets to provide for my retirement income. If I need long-term care, I may have no extra source of income to pay for the costs.
Suitable Solution: A suitable long-term care policy can provide the money you will need should a disabling illness or injury strike, even if you are not confined to a nursing home or hospital.

5. How can I increase my income?
A. Monthly Income
Problem: My interest income, after paying income taxes, is not enough to meet the increasing costs of living. I need to increase my monthly interest income without adding any investment risk.
Suitable Solution: With an annuity, it is possible to increase your after-tax income for either more monthly income right now – or more monthly income starting at some later date you pick – and lasting for your lifetime and beyond. With an annuity, there may be no market risk. Your money is safe, so you can count on the return of 100% of your money, in addition to a return on your money.
B. Transfer Costs
Problem: I understand I may be able to increase my current income or the tax-deferred growth of my assets by transferring some of my CDs, mutual funds, money markets, stocks, etc. into annuities, but I do not want to incur the transfer cost involved in such transaction.
Suitable Solution: With some suitable annuities, it may be possible to increase your principal immediately which will help recover transfer costs.

6. How can I guarantee my monthly income and my principal?
A. Guaranteed Retirement Income
Problem: I want three guarantees for my retirement income:

√ My monthly income checks must stay the same every month – never decreasing when interest rates decline

√ My monthly income checks must keep coming to me for my entire life – no matter how long I live.

√ Many investments I have looked at – or have my money in – may not give me these two financial guarantees.

Suitable Solution: Annuity guarantee:
Your monthly income checks can be the same every month. Your income will never decrease just because interest rates go down.
Your monthly income checks will be there forever. With a life income option, your money will never run out. And if you die early, your annuity will guarantee to continue the same monthly income checks to whomever you name for the balance of a minimum guaranteed period, which you predetermine.
B. Safety of Principal
Problem: Many investments do not guarantee that my principal will never be less than my original investment.
Suitable Solution: Unlike other financial products, suitable annuities can guarantee that your principal will never be exposed to market risk.
Your policy values don’t have to go down because of market fluctuations – they may only go up as your guaranteed interest is credited each month, until you take your income payout.

7. How can I make sure my heirs will be protected in case of my premature death?
Probate Costs
Problem:
Probate administrative costs and fees can average 8% to 10% of my assets. My assets are not available to my heirs until my estate is approved by probate court if I don’t have a will. Average time my assets remain tied up in probate court can be one to two years. Without a will, all records of my assets are available to the general public. The court, in absence of a will, transfers my money to those family members as directed by law.
Suitable Solutions: A suitable annuity, with a properly designated beneficiary other than your estate, can bypass probate and eliminate all probate administrative costs, fees, delays, and publicity. Therefore, at your death, more of your money can go to those family members you choose. A suitable life insurance policy bypasses probate and delivers tax-free insurance.
Checklist of issues you may want to address:

√ Defer paying federal income taxes on your interest income

√ Defer paying state income taxes on your interest income

√ Avoid the costs and delays of probate

√ Increase your after-tax interest income

√ Keep more of your Social Security income after taxes

√ Make sure your money, at your death, will go to those family members you choose, not those the probate court chooses

√ Switch your IRA accounts to annuities – with 100% IRS approval