Annuities

Are you concerned about the health of your finances in the future? Do you want to plan for your future to ensure your retirement is comfortable (or your children’s future is financially sound)?

Financial matters always tend to be complicated. Two of the most difficult questions to answer are where to put your money and when to put it there. At Hobart Financial Group, we help people find the answers to these and many other questions.

Many of our clients have seen great results from choosing to invest in annuities. Here, we’ll look at three annuity options you may want to consider:

 

Fixed Annuities

Annuities operate as a contract between a person and a financial institution, similar to an insurance policy. The individual pays a premium that will, at a predetermined date, be returned to the individual with the additional value of the investment. With fixed annuities, the owner receives a locked interest rate for a set length of time. This provides the owner with safety and predictability.

Fixed annuities have been lauded for years as an effective investment strategy accompanied by major advantages, including:

  • A safe investment – You know exactly what to expect with this kind of investment.
  • Tax deferral – Fixed annuities are tax-deferred, which means this money won’t be taxed until the investment is withdrawn.
  • Shelter from creditors – Annuities are safe from probate proceedings and cannot be touched by creditors in most situations.

 

Fixed Index Annuities

Annuities are a contract between an individual and a financial institution. The person pays a premium that will, at a predetermined time, be returned to the individual in a lump sum or as incremental payments. Any money placed into an annuity is tax deferred.

Fixed index annuities are tied to a specific financial index, like the Nasdaq or the S&P 500. People choose this kind of annuity because there is the ability to make a greater return than with other options. Most types of retirement investments pay back the premium plus a small amount of interest. Fixed index annuities have the potential to earn a higher interest rate with less exposure to risks associated with the stock market.

 

Immediate Annuities

An annuity is a financial product that functions as an agreement between an individual and a financial institution. The annuity owner makes a lump sum payment to the company and the company agrees to make regular payments back to the owner at a later time. In respect to when these payments happen, there are two basic types of annuities: deferred and immediate. Deferred annuity payments commence at later time while immediate annuities can start payouts almost immediately.

For those looking for steady income payments within a short amount of time, immediate annuities are a common selection. The growth of the funds placed within an immediate annuity is tax-deferred, which means you aren’t required to pay taxes on this increase until the money is withdrawn.

To help you make an informed decision on immediate annuities, we can provide you with access to products from several different companies. Because of this, we are better equipped to find an annuity that fits your needs.

More Questions? Call Us for Answers

If you have additional questions about annuities or want to set up a consultation, contact our office today. After a short conversation about your current finances and retirement goals, one of our experienced financial professionals will be able to help you figure out if an annuity is a good choice for you.

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