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WHAT IS AN ANNUITY?

An annuity is a contract with an insurance company that provides certain benefits in exchange for a deposit of money, known as a premium.  An annuity is designed to provide income during a person's life, which makes an annuity a popular choice for investors who want to receive a steady income stream in retirement.  An annuity can pay an income that can be guaranteed to last as long as you live.

An annuity is neither a life insurance nor a health insurance policy.  It's not a savings account or a savings certificate.  You shouldn't buy an annuity to reach short-term financial goals.  An annuity is designed to be a long-term retirement tool, and not to meet short-term financial goals.  Anyone who considers an annuity should research it thoroughly first, before deciding whether it's an appropriate investment for someone in their situation.

Annuities can be purchased with nonqualified funds, on which taxes have already been paid, or with pretax money, also known as tax-qualified money, examples of which include Individual Retirement Arrangement (IRA), Roth IRA's, 401(k) plans, or other retirement plans.

DIFFERENT TYPES OF FIXED ANNUITIES:

There are two basic types of fixed annuities:  deferred and immediate.

With a deferred annuity, your money is invested for a period of time until you are ready to begin taking withdrawals, typically in retirement.

If you opt for an immediate annuity you begin to receive payments soon after you make your initial investment.  For example, you might consider purchasing an immediate annuity as you approach retirement age.

The deferred annuity accumulates money while the immediate annuity pays out.  Deferred annuities can also be converted into immediate annuities when the owner wants to start collecting payments.

WHY BUY A FIXED ANNUITY?

Recent history has shown that economic turbulance can happen quickly.  It is important that a portion of your money be protected from market fluctuation - especially as you get closer to retirement.  Fixed annuities can offer a mix of safety and competitive earnings.  When you purchase a fixed indexed annuity, you get the features and benefits of a fixed annuity plus the ability to link your earnings to the performance of an established market index, such as the Nasdaq-100 or S&P 500.

A fixed annuity is considered to be one of the safest investments for risk-averse investors and provides guarantees of principal.  Contact us for more details and a free illustration.

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Heritage Financial Services
dba HFIS Insurance Services
CA License # 0G98543
23792 Rockfield Blvd, Suite 230
Lake Forest, CA 92630
Local- 949.215.9700
Fax- 949.215.5455
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