Jeffrey Thatcher: Financial Planning: Annuities May Help Make Your ...

Today, many people are living longer than in the past. That means that the length of retirement can be 25 to 30 years or more. So it's important to develop a retirement investment strategy that generates an income stream that you won't outlive. If you're looking for an investment vehicle that promises a guaranteed income for life, then you may want to consider annuities.

Annuities Defined

Simply put, annuities can help ensure that you won't outlive your savings. Annuities are insurance contracts that promise future payments. They?re long-term, tax-deferred investment vehicles designed for retirement purposes.? There are two distinct phases to annuity investing: the "accumulation phase" occurs when you are contributing, while the "annuitization or distribution phase" occurs when you withdraw money.

While annuities may be attractive because they usually impose no contribution limits and offer tax deferral, they also have other appealing features as well, including numerous "payout" options in the distribution stage. For instance, during retirement you can receive your money from an annuity in a single lump sum or as a series of regular payments over your life or a predetermined number of years. Some retired clients find it easier and less stressful to manage their household expenses through a regular income stream, just as they did while working.

But getting a regular income stream doesn't necessarily limit your options. Today's annuities offer the flexibility, access and control over your money that often wasn't available in the past. Product innovations have resulted in optional benefits that provide downside guarantees?, the ability to capture the market's upside, inflation protection and cost-of-living increase features, all of which may help investors plan for a long retirement.

In short, annuity payouts through a regular income stream may be an important part of your retirement portfolio. If you own an annuity now, you might want to consider using it to potentially generate income. For more detailed information about the role that annuities might play in your financial future, contact a qualified financial professional.

?Riders are additional guarantee options that are available to an annuity or life insurance contract holder.? While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policyholder should review their contract carefully before purchasing.??

Variable and fixed annuities are long-term, tax-deferred investment vehicles designed for retirement purposes; but the variable annuity contains both an investment and insurance component.? Variable annuities are sold only by prospectus. Guarantees are based on the claims paying ability of the issuer. Withdrawals made prior to age 59 ? are subject to 10% IRS penalty tax and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor?s unit, when redeemed, may be worth more or less than their original value.?
Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing.? The prospectus contains this and other information about the variable annuity contract and sub-accounts.? You can obtain contract and underlying sub-account prospectuses from your financial representative.? Read the prospectuses carefully before investing.

Jeffrey Thatcher is a CERTIFIED FINANCIAL PLANNER ? and Director of HVFCU Financial Services, the investment division at Hudson Valley Federal Credit Union.

Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

No Credit Union Guarantee

Hudson Valley Federal Credit Union and HVFCU Financial Services are not registered broker/dealers and are not affiliated with LPL Financial. This material was prepared for Jeff Thatcher?s use.

Portions of this material prepared by Standard & Poor?s Financial Communications.??????

? 2010 Standard & Poor's Financial Communications. All rights reserved.

Source: http://hvfcufinancialservices.blogspot.com/2012/02/annuities-may-help-make-your-income.html

harvard yale joe paterno lung cancer joe paterno lung cancer john tucker must die uk basketball iowa state faroe islands