Annuities are one of the most powerful tools available for early retirement planning. Due to the much-extended life expectancy common today, it is quite possible for a person to outlive his or her financial resources.

Annuities possess a benefit that other financial products do not. This benefit is a payout that a person cannot outlive. An annuity is a retirement-planning tool that has two phases: the accumulation phase and the annuitization phase. In the accumulation phase, you give money to an insurance company over a period of time or in a lump sum, and it earns a rate of return. In the annuitization phase, you begin to withdraw regular payments (such as monthly or annually) from your contract until you die. The annuitization phase may begin immediately with an immediate annuity or may be delayed with a deferred annuity. Annuity settlement options allow you an income until your death or for a certain period. If you choose a period certain and die prior to that date, the balance of your annuity is paid to your designated beneficiary.

Annuities may be qualified or non-qualified. Tax qualified annuities allow you to set aside money in an annuity and defer taxation of that portion of your income until you retire, if you meet the IRS requirements for Individual Retirement Accounts.

Annuities may be fixed, variable or equity indexed. The fixed annuity will have an established interest percentage that will remain constant or "fixed" during the stated period. A variable annuity interest return will depend solely on the performance of the investment tool it is linked to. An equity indexed annuity is tied to an index such as the Standard & Poor's 500 Index or S&P 500. If the index goes up, the annuity is credited with a percentage of gain depending on the contract. If the index goes down, neither the original principal nor the previously credited interest is affected. This allows a person to invest in a market sensitive plan without the risk of losing their principle investment.

You may contact us for the current interest rates on fixed or equity-indexed annuities. Variable annuities can only be accessed through an NASD securities licensed agent.

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