One of the biggest fears in retirement is outliving your money; whether you have modest means or millions saved, the same fear exists according to documented surveys from those retiring. One of the greatest concerns is financial uncertainty especially when it comes to stock market risk affected by events outside of one’s control. Fixed and fixed index annuities are free from market risk and offer lifetime guarantees that allow you to maintain majority control of your entire account value.

Annuities are not just for income. Many retirees use annuities to diversify for safety similar to the way they would use bonds in a stock/bond portfolio. Fixed-index annuities are designed to give fixed-income interest gains that compete with bond returns while eliminating the credit risk associated with bonds. Annuities always have built-in safeguards for guaranteed lifetime income (protecting against longevity risk) that bonds, US Treasuries, and banking instruments cannot offer. Many retirees use them as the foundation for their portfolio to accomplish steady growth with principal protection.”

The last thing anyone needs is an unintended taxable event that could have been avoided with proper retirement planning; that leverages IRS statutes to avoid tax. Annuities are no exception to this type of planning; they are financial vehicles that have many tax-favorable attributes. However, they also have some pitfalls that require proper execution and long-term planning that is specifically tailored to meeting defined retirement objectives. Structured correctly, annuities can be extremely tax efficient and in certain strategies produce tax-free growth and income as well as wealth transfer.

Most couples have multiple income streams that continue to pay while both are living such as Social Security, pensions, annuities, investments, and etc. Unfortunately, when a spouse passes some of these important income streams may be reduced or stop altogether. Annuities that are set up correctly in advance can be turned-on if needed to immediately fill the income shortfall and take the pressure of the grieving spouse in making difficult financial decisions.

Most of the companies that offer annuities have been through up and down business cycles for one hundred years or more; facing a depression, recessions, wars, and pandemics. The number one responsibility that insurance companies have is protection of their policyholders. As an independent insurance advisor, Pendo Insurance works with more than 50 of the largest, oldest and most well-respected life insurance companies in the world so our clients have peace of mind regardless of what product they choose.