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Annuities, IRA's or Individual Retirement Accounts

With the future of Social Security in question and company pensions quickly becoming a thing of the past, retirement is no longer as certain as it once was. An IRA is a secure investment that can guarantee income for your retirement.

Why are IRA,s so important?

Retirement planning can be a bumpy road. Without the right investment vehicle, you may outlive your savings or suffer a lower quality of life to make ends meet. The government doesn’t make it easy, either. Taxes, Medicaid, estate planning, and a variety of other factors add to the uncertainty, putting your financial security in question.

Contribute early in the year- If you are looking to claim a tax deduction by funding your traditional IRA, why wait until approaching April 15 of the following year? Make your contribution early in the year.
Be proactive-Too many people contribute to an IRA without ever stopping to think their investment strategies. can stay on top of your investments and make appropriate changes.
Diversify- Investing wisely typically means diversifying across asset classes. Within the equity portion of your portfolio, index funds offer one means of diversifying

Retirement is your opportunity to live your dreams. Don’t spend it on a modest income or, even worse, burdening your family financially. With an Individual Retirement Account, you can guarantee income for the rest of your life, so you can enjoy your golden years without worrying about your finances

Variable Annuities

A variable annuity is a good retirement investment option for many people in the Fountain Valley area, but like any other annuity investment, it pays to speak with an experienced insurance agent who can tell you about the benefits, and then help you decide if variable annuities are the very best choice for your unique situation. At Michael Brunner Insurance Agency, a California insurance agency backed by years of experience, our experts will gladly review the pros and cons of variable annuities with you. First, it pays to understand what a variable annuity is.

Essentially, variable annuities are a binding agreement between you and your insurance company. Under the variable annuity contract, you agree to pay into the variable annuity in one lump sum investment or you can make a series of payments over time.

Your variable annuity insurance company, in return, agrees to make periodic payments back to you. These payments can begin right away, or the payments can begin at a future date on which you agree. It’s common for investors to want their variable annuity payments to begin around retirement age.

The main distinguishing feature of a variable annuity is in its investment flexibility. Through a variable annuity, you have the choice of investing in a variety of investment options such as mutual funds, stocks, international stocks, and so on. How much your variable annuity grows depends on the success of the investments you choose.

Some advantages of variable annuities include:

A death benefit that allows your beneficiary to inherit your variable annuity
Not paying income tax on your variable annuity earnings until you receive payments
Having the option of receiving monthly payments for a specific period, such as 25 years, or receiving payments for the rest of your life

Due to the fact that you can choose how to invest your variable annuities, they may carry a little more risk than other savings accounts that have a guaranteed rate of return.

Immediate Annuities

As a Fountain Valley, California insurance agent offering products from numerous insurance companies, Michael Brunner Insurance Agency would be happy to advise you on the benefits of investing in an annuity, including an immediate annuity. A number of our clients in the Fountain Valley area have inquired about how an immediate annuity can give them the security of a regular income, particularly during their retirement years.

The theory behind an immediate annuity is relatively simple. An immediate annuity provides you with a lifetime of steady (typically monthly) income payments immediately after you purchase the annuity. Immediate annuities are usually purchased with a single, lump-sum payment that’s converted into a steady stream of payments for as long as you live. So if, hypothetically speaking, you purchase an immediate annuity for $100,000 within a month or so you would begin receiving $700 per month in income payments for the rest of your life.

The amount of monthly income you receive from an immediate annuity depends on many factors including your age, the amount you invest, and the type of immediate annuity you choose. People usually buy an immediate annuity because they want the security of knowing they will receive a steady, monthly income.

An immediate annuity also relieves the fear of outliving your retirement savings. If, for example, you’ve saved $500,000 for retirement, but your excellent health indicates that you may live another 30 years, an immediate annuity would give you a steady monthly income you can depend on, no matter how long you live. This may be a more comforting option than trying to make your savings stretch for an indefinite amount of time.

You can buy an immediate annuity with any money you’ve saved, such as in a 401(k), IRA, inheritance, or savings account. Some people use money from an inheritance or the sale of assets, such as a home, to purchase an immediate annuity.

Immediate annuities are usually recommended for people who are of retirement age and in good health. It’s also recommended that you only invest a portion, say 25%, of your savings into an immediate annuity, and invest the rest of your retirement savings into other wealth-building options. It’s almost never a good idea to sink all your savings into an immediate annuity.

There are some drawbacks to immediate annuities. For instance, if you were to die right after you buy an immediate annuity, the money you invested could be lost forever. That’s why many insurance companies offer various types of immediate annuities, such as those that enable you to pass on your immediate annuity to a beneficiary or spouse after you die.

Fixed Annuities

Before you purchase an annuity, it’s best to understand the many annuity options available. For example, annuities can be deferred or immediate, variable or fixed annuities. At Michael Brunner Insurance Agency, our Fountain Valley, California annuity experts can discuss annuities with you and answer all of your questions. Our goal is to help you decide how annuities may best meet your retirement savings goals.

Michael Brunner Insurance Agency can give you information on the many different annuity products available in the Fountain Valley area, including fixed annuities. Probably the most well-known type of annuity, fixed annuities is insurance contracts which are actually an investment. Your investment in a fixed annuity can be made in one lump sum or in scheduled payments. After they mature, fixed annuities offer you, as the owner of the annuity, a set amount of money back.

Fixed annuities are similar to certificates of deposit (CDs) and other investment vehicles used to accumulate wealth. However, fixed annuities have their own unique qualities that make them useful to certain types of investors. Fixed annuities are typically considered low-risk investments; however fixed annuities are not insured by the government or any other institution. Therefore, when you consider buying fixed annuities, it pays to make sure that the issuing insurance company is financially sound and highly rated.

When you purchase a fixed annuity, the insurance company guarantees that you will receive your investment, plus a minimum rate of interest, back when the fixed annuity matures. The money you have in a fixed annuity will grow either at a fixed dollar amount, fixed interest rate, or another formula specified ahead of time.

Fixed annuities are good for those investors who want to have control of when they pay taxes on their annuity earnings. In other words, you don’t have to pay taxes on the wealth you accumulate from fixed annuities until you make a withdrawal. This means your fixed annuity can grow, tax-deferred, for years.

There are a few options for how you may withdraw your money from fixed annuities. You may elect a lump sum payment at the end of the fixed annuity term, or you may prefer the lifetime income option, which will give you a steady flow of income for the rest of your life. Some fixed annuities will allow you to withdraw a portion of your money, without penalties, before the annuity matures. Or, after your fixed annuity matures, you may elect to let your fixed annuity funds accumulate for a longer period of time.

An additional benefit of fixed annuities is that, after your death, your annuity’s value can be paid directly to your named beneficiary or beneficiaries without going through probate.

Finally, many of our clients in the Fountain Valley area find fixed annuities very attractive because there is no limit to how much money you can invest in them. Conversely, there are limits to how much you are allowed to invest in a 401(k), IRA, etc.

Index Annuities

If you’ve always wanted to invest in the stock market but you’ve never made that first step, an index annuity may be a good option for you. Similar to all other annuities, index annuities are purchased from an insurance company as an investment. However, what makes an index annuity different from other annuities is that the returns of an index annuity are based on a stock market index such as the S&P 500 or the Dow Jones Industrial Average. At Michael Brunner Insurance Agency in Fountain Valley, California, we’ve found that index annuities have become increasingly popular in the Fountain Valley area over the past few years. Our experts are more than willing to discuss the benefits of an index annuity with you and help you decide if an index annuity will be advantageous to your future.

The intriguing fact about an index annuity is that it may enable you to participate in the stock market with less risk than if you simply purchased stocks from your local Fountain Valley, California stock broker, all the while hoping your stocks perform well. With an index annuity, if the stock market goes up, you will enjoy higher returns. If, however, the stock market goes through a rough period, an index annuity generally comes with a guarantee that you will be protected from loss. In addition to this safety net, some index annuities also come with a guaranteed minimum rate of return even if the stock market does poorly.

It’s good to keep in mind that an index annuity is a deferred annuity, which means you will not receive payments until a specified date in the future. Some index annuity insurance policies will allow you to make limited withdrawals without the threat of penalties. All in all, however, an index annuity is a long-term investment that you should not count on for returns until you reach your retirement years.

Deferred Annuities

Fountain Valley area residents who are interested in long-term, tax deferred retirement savings are wise to investigate the advantages of a deferred annuity. Michael Brunner Insurance Agency, a Fountain Valley, California insurance agency, offers deferred annuity products from several different insurance companies, giving you the flexibility of choosing an annuity that best fits your retirement savings goals.

A deferred annuity is an insurance contract that you pay money into for a specified amount of time, with the expectation that your invested money will grow. You do not receive income payments from the annuity right away because your payments are “deferred,” or saved, until a future date.

There are several advantages to purchasing a deferred annuity. Unlike an individual retirement account (IRA) or 401(k), there is no limit to how much you can contribute to your deferred annuity savings. Plus, with a deferred annuity, you heirs can receive a death benefit equaling the amount you invested plus the interest you earned (minus the amount you withdrew).

One of the main benefits of a deferred annuity is that your retirement nest egg can grow tax-deferred. You pay no income tax on the money in your deferred annuity until you begin receiving payments from it.

In general, you do have access to your money in a deferred annuity, often without any penalties. When you convert your deferred annuity into income, the annuity can provide you with a guaranteed stream of income payments for the rest of your life.