Annuities

Over the next 12 years, more than 10,000 baby boomers reached or will reach retirement age. However, just over half will only have assets of $250,000 or fewer to retire on.In the period between 2024 and 2027, more than 11,200 Americans per day will have reached or will reach retirement age. However, just over half will only have assets of $250,000 or fewer to retire on. 

Our clients are often seeking guidance on a variety of financial objectives, including protection against market losses, how they can guarantee income for healthcare and other long-term costs, as well as solutions that may provide opportunities for growth while helping address tax and planning concerns. 

Given ongoing discussions about the long-term funding of government programs such as Social Security and Medicare, it is important that Boomers and members of future generations focus on a common goal: establishing a significant and lasting source of retirement income. Our representatives at HTR Group can help provide personalized annuity solutions to fit your unique needs, so contact us today!

Annuity Features and Benefits

Annuities are insurance products that are filed with and approved by state insurance regulators. Fixed annuities are not directly subject to market losses; its guarantees are backed by the claims-paying ability of the issuing insurer. Owners of fixed annuities do not participate directly in any financial market. Whether interest is declared in advance or credit based on the performance of an external index, subject to the terms of the contract, premiums and previously credited interest are protected from market losses.

Insurance Protection: Unlike the money you save in your bank accounts, annuities do not have FDIC protection. Insurance companies often demonstrate their financial strength by obtaining a rating from an objective rating firm like Standard & Poor’s, A.M Best, Duff & Phelps, or Moody’s. 

Liquidity: Annuities have some provisions that may allow money to be withdrawn. Many contracts provide for annual penalty-free withdrawals of a portion of the account value, and may allow access to earned interest Additionally, some contracts contain provisions that allow access to your funds in the event of qualifying circumstances, such as hospitalization, terminal illness, nursing home confinement  other covered hardships. 

Annuities can also be structured to provide income for the life of the owner for a fixed term, which may help support retirement income needs and allow earnings to grow on a tax deffered basis until withdrawn. Annuities are long-term savings vehicles and withdrawls taken prior to age 59 ½ may be subject to a 10% federal tax penalty in addition to any applicable taxes. 

Tax Treatment:  Annuities offer tax-deferred growth. Tax treatment may differ for qualified and non-qualified annuities . When distributions are taken, they may be subject to ordinary income taxesBecause earnings remain in the contract until withdrawn, tax deferral may allow assets to continue growing over time. Consult a qualified tax professional regarding your specific situation.  

Interest Rates: There are several variations of annuities Fixed annuities provide interest based on rates established by the issuing insurance company and may include contractual guarantees. Indexed annuities offer the opportunity to earn interest linked to the performance of a market index, such as the S&P 500®, while protecting contract value from direct market losses, subject to the terms and limitations of the contract. The owner does not participate directly in the stock market. 

Misconceptions About Annuities

You may have heard the saying, “It’s not your father’s annuity,” and that’s because annuity products have changed and evolved significantly throughout the past decade. This has also contributed to an environment full of mixed messages regarding the pros and cons of annuities. 

Looking for specific information about a particular product? Have an article you’ve read with information you need help clarifying? Not every annuity is right for every client. To find out what makes sense in your unique financial situation and more about annuities and whether they can positively impact your retirement future, contact The HTR Group team.  

Comments regarding safety, principal protection, and guaranteed income streams apply only to fixed insurance and annuity products. They do not apply to securities, investment advisory services, or other market-based investments. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company and are not guaranteed by any bank, credit union, or the FDIC.