Benefits of an annuity
When you make contributions to a 401(k), you will not owe taxes on these funds or any earnings in the account until you withdraw the money. A Fixed Index Annuity can also provide tax deferral and growth potential, along with insurance against the risk that you’ll outlive your money after you retire. They give you the potential to grow your retirement savings, help manage the risk of loss due to market downturns and can create a guaranteed income stream for the rest of your life.
A fixed indexed annuity can provide the added benefits of:
Protection from loss due to market downturns
Guaranteed lifetime income
Flexibility to customize income
Creating a legacy
Rolling over tax-qualified retirement assets into an annuity can help you achieve your retirement goals, while also providing you with additional features for creating a well-rounded financial plan. Here is a list of the features.
Growth potential
A fixed indexed annuity has the potential to grow your money while also helping manage the risk of loss. It offers growth potential based, in part, on the upward movement of an external market index.
Continued tax deferral
Rolling over your 401(k) is tax free as long as you follow IRS guidelines. You won’t pay taxes on any growth in your annuity until you’re ready to withdraw money, typically when you reach retirement.
Protection from market downturns
Since a FIA does not directly participate in any stock or equity investments, your principal is protected from loss due to market downturns. Although you may earn zero percent interest in any given term period, you’ll never earn less than zero.
Guaranteed lifetime income
With life expectancy growing it is importance to ensure you have enough income to live a long life in retirement. An annuity can create a guaranteed income stream in retirement and supplement income from Social Security, retirement plans and other savings vehicles. If you choose a FIA, it may include or offer optional riders that provide lifetime income, so you can be protected from outliving your savings and can gain greater peace of mind about your future financial well-being.
Flexibility
Along with guaranteed lifetime withdrawals, a FIA may have an income rider that offers additional benefits, such as inflation protection, a death benefit or living benefits for confinement or terminal illness. You also typically have access to a least a portion of your money without incurring a Withdrawal Charge.
Legacy for your loved ones
With an annuity, you can provide your loved ones with a source of funds in the event of your death.
Meeting your retirement savings goals
To better reach your long-term savings goals and create financial security for the years ahead, building a retirement income plan is essential. Talking to a retirement professional can help you discover the best strategy and determine if rolling over a non-contributing 401(k) into an annuity is the right choice for you.
My team is here to help you if you need some guidance.
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