Elliot Glass Coral Springs Insurance

IMPORTANT information to get your affairs in order??

2023-01-11

Make sure all bank accounts have direct beneficiaries. The beneficiary need only go to the bank with your death certificate and an ID of their own.

TOD = Transfer On Death deed if you own a home. Completing this document and filing it with your county saves your heirs THOUSANDS. This document allows you to transfer ownership of your home to your designee. All they need to do is take their ID and your death certificate to the county building and the deed is signed over. Doing this will avoid the home having to go through probate.

Living Will: Allows one to put in writing exactly what you want done in the event you cannot speak for yourself when it comes to healthcare decisions as well as other final decisions.

Durable Power of Attorney: Allows one to designate a person to make legal decisions if you are no longer competent to do so.

Power of Attorney for Healthcare: This document allows one to designate someone to make healthcare decisions for them.

Last Will and Testament: Designates to whom personal belongings will go to.

Funeral Planning Declaration: Allows one to say exactly one’s wishes as far as disposition of the body and the services.

If the above documents are done, you can AVOID probate.

If all the above is not done, you have to open an estate account at the bank. All money that doesn’t have direct beneficiaries goes into this account. You have to have an attorney to open the estate account. The attorney also has to publicize your passing in the newspaper or post publication at the county courthouse, to allow anyone to make a claim on your property. - It’s a complete PAIN.

Make a list of all banks and account numbers, all investment institutions with account numbers, lists of credit cards, utility accounts, etc. Leave clear instructions as to how and when these things are paid.

Make sure heirs know where life insurance policies are located.

Make 100% sure SOMEONE knows your Apple ID, bank ID account logins and passwords!

Make sure you have titles for all vehicles, campers, etc!

Set up a TRUST for intended beneficiaries, especially those that are too young, and appoint a trustee of said trust.

MOST IMPORTANTLY!!!! - Talk with those closest to you and make all your wishes KNOWN. Talk to those whom you’ve designated, as well as those close to you whom you did not designate. - Do this to explain why your decisions were made and to avoid any lingering questions or hurt feelings.

Hope this helps! Hope this lights a spark to encourage all your friends and family to take care of these things to make it easier for those we all leave behind!

My hope is that the above list at least helps you start an important conversation with your loved ones...

GET YOUR FREE WILL BY CLICKING THE BUTTON BELOW

Use Code: 072PN Email address: elliot@elliotglassinsurance.com

GET YOUR FREE WILL

Is an Annuity a Good Investment?

2022-11-29

You probably envision Wall Street and the frantic pace of the New York Stock Exchange floor. There are some of you who may visualize Fortune 500 ticker symbols. You could also think of the less exciting pie chart on your annual mutual fund report if you’re not much of a risk taker.

But, have you ever thought about annuities? Probably not. Financially speaking, annuities are not considered investments. Instead, annuities are insurance products that guarantee income at retirement.

However, this does not mean you should not invest in annuities. And, on the flip side, it doesn’t mean you should either.

I know. That sounds contradictory. However, your personal investment objectives will determine whether or not an annuity is a good investment for you. It’s also important to consider your age, time horizon for investing, risk tolerance, and lifestyle when determining your investment objectives.

However, if you’re unsure whether annuities make sense for you, the following guide may help.

What is an Annuity?

Annuities are confusing to a lot of people. In fact, only 25% of consumers passed an annuity knowledge test (70%) according to a study by Secure Retirement Institute (SRI).

Due to this confusion surrounding annuities, it can be difficult to decide if they are a good investment and worth adding to your retirement portfolio. But let us simplify it for you.

What exactly are annuities?

Annuities are simply contracts between a person and an insurance company. Annuities are best known for protecting principals, providing lifetime income, and planning for long-term care needs.

You might see annuities marketed as investments when you’re shopping for them. In retirement, this investment is aimed at generating income for you. It’s important to remember that this is a contract, not a retirement plan.

In the event of a breach of a contract, expect hefty penalties. Consequently, annuities are not as accessible as savings accounts.

How are annuities investments?

During retirement, annuities can provide income and growth that are tax-deferred. Annuities can be categorized into two types: fixed annuities and variable annuities. Variable annuities are based on the performance of a market index, such as the S&P 500, whereas fixed annuities pay a guaranteed rate of return.

The use of annuities as a retirement income supplement is becoming more and more popular. This is mainly due to the fact that pensions are becoming extinct like the Dodo. In fact, only 15% of workers in the private sector have access to one, according to the March 2021 National Compensation Survey from the Bureau of Labor Statistics (BLS).

However, those who have invested heavily in stocks or bonds may find annuities particularly beneficial. Why? Annuities provide a source of income independent of market fluctuations.

Annuities come in many forms, but a fixed index annuity is among the most popular. As well as providing tax-deferred growth, these annuities protect you from downside risk. In this regard, fixed index annuities can be an effective retirement planning tool.

As an example, you’ll earn 3% interest on every dollar you put into your Due annuity plan. And, that’s guaranteed.

How does an annuity work?

An annuity is an arrangement in which the owner of the policy transfers the risk to an insurance/annuity company. Through the premiums it charges, the company offers the annuity assumes the risk for the owner. Annuities can have a single payment or several payments, depending on the type. Premiums are paid during the accumulation phase.

As opposed to other types of insurance, annuities do not require continuous premium payments. As time goes on, you’ll no longer need to make annuity payments and will begin receiving payments instead. This is when the payout phase of your contract begins.

There are a number of ways in which annuities can be paid. You can design an annuity to provide you with payments throughout your lifetime or the lifetimes of your heirs. You can also combine a lifetime income stream with a guaranteed payout over a specified period.

How does a “life with a certain period” annuity work? It promises lifetime income. But, your beneficiary will receive the remaining value of the account if you die within a specific timeframe.

It is common for annuities to be paid over an extended period of time. Like Social Security, they are also based on life expectancy. As a result, if you begin receiving income much earlier in life or if the term is longer, you should anticipate smaller payments.

Annuities can be paid monthly, quarterly, annually, or even as a lump sum. Furthermore, they can be begun immediately or deferred for a long time.

The different types of annuities.

We briefly touched on fixed and variable annuities. But, there are actually five types of annuities that you can choose from. It’s like ordering a taco. Although pretty much the same, you have the choice between beef, chicken, pork, fish, shrimp, or beans. And, each protein slightly modifies your meal.

Fixed annuities.

Throughout the term of the contract, owners of annuities receive a fixed interest rate. With Due, for instance, you will receive 3% on all deposits. So, it is similar to a certificate of deposit. It is a safe and predictable option, even when market performance is good.

Variable annuities.

The returns on a variable annuity differ from those on a fixed annuity since they are linked with the stock market. In other words, its performance determines how much it will gain or lose, making it a less predictable and riskier option.

Fixed indexed annuities.

An annuity of this type combines the advantages of both a variable annuity and a fixed annuity. It provides investors with a minimum guaranteed rate of return, similarly to a fixed annuity. However, it also tracks an underlying index (e.g. the S&P 500). Therefore, rising stock markets can result in higher gains. You should always read the fine print, as there are caps, spreads, and participation rates that can impact the upside.

Immediate annuities.

Basically, you pay a lump sum to the insurance company and start receiving income payments right away. After the payment has been made, payments are usually made within 30 days. Lifetime payments are available in some immediate annuities, while fixed payments are available in others. In general, interest rates affect annuity income, which will impact payouts.

Deferred annuities.

In this case, there is also an upfront payment involved. Annuity payments will, however, be issued later. Since deferred annuities have more time to grow, they may offer higher payouts than immediate annuities. In exchange, early withdrawals are difficult.

How Do Annuities Benefit Investors?

A key benefit of investing in annuities is that they provide regular income before or during retirement. Moreover, your contributions are tax-deferred. Annuities are also exempt from a contribution limit or required minimum distribution (RMD).

There are several additional benefits, including:

Guaranteed income source.

Having a guaranteed income source reduces the worry that retirees and pre-retirees will lose retirement savings in a downturn or outlive them. You fund the account with an annuity and typically earn a predetermined amount of interest, regardless of market conditions. With variable annuities, this can be different as they’re exposed to the market.

Premium protection.

In my opinion, this cannot be emphasized enough. An insurance company guarantees a minimum interest rate and principal in a fixed annuity. Therefore, the value of your fixed annuity will not decrease as long as the insurance company is financially sound.

Tax advantages.

Contributions to an annuity are tax deductible as well. It has no contribution limit, unlike IRAs and 401(k)s, which do have a limit on how much you can contribute annually. In the event that you have maxed out your other retirement accounts, annuities may be a good option for tax-deferred savings.

The right annuity can help you hedge against inflation.

Variable annuities are better suited to inflation hedges than fixed annuities. When used properly, variable annuities can guarantee you maintain your purchasing power throughout retirement if you boost your periodic payments by at least the cost of inflation based on your investment decisions.

Long-term care. Many retirees overlook this costly expense.

But, it is possible to insure against some of these costs with an annuity.

No RMDs.

Traditionally, withdrawals from retirement accounts must be made by the age of 7 ½. In contrast, retirement annuities do not carry that stipulation, so the funds may grow until needed.

Flexibility.

Through what’s known as a 1035 exchange, you can transfer money from one annuity to another, even if they’re with different companies. Taxes are not applied to your annuity earnings when using this method. It’s also possible to hold an annuity in a retirement plan, such as a 401(k) or IRA, or outside of one.

Are There Any Risks Associated with Annuities?

Yes. There are risks associated with annuities, just as with any investment. As such, despite the fact that annuities promise retirees a steady income, they also come with some sacrifices.

Annuities are complex.

The complexity of some annuities makes them difficult to understand without professional assistance. In fact, the structure of an annuity is the most complex of all retirement payment plans. Most insurance providers offer lifelong benefits as their most attractive selling point. However, retirees are grossly misled about the high taxes and the payment calculations.

There is a missing income benefit.

Annuities provide a lifetime income stream by saving money now. At the same time, you would lose that long-term benefit if you passed away suddenly. A beneficiary can be designated with some annuities, but there may be an additional charge.

Locking up money you may need.

If you suddenly need those funds, it can be difficult to access your annuity investment or cash it out. In some immediate annuities, after investing your principal, you lose access to it even though payments begin immediately. In some cases, you may be able to withdraw your principal or select time periods during which you can do so. But your monthly payment may be smaller. Also, you will usually have a 10% penalty if you withdraw from a deferred annuity before you turn 59 ½.

Annuities can be pricey.

Depending on the type of annuity, owners may have to pay high fees. Variable annuities, for instance, can charge fees between 2% and 3%, decreasing the value of your account and your investment return. You may also run into mortality and expense risk charges, administrative fees, and charges for add-ons like stepped-up death benefits.

Conservative payouts.

Even though annuities offer security and predictability, their returns aren’t as high as other investment options.

Insolvent insurance companies.

It is important to ensure the company you purchase an annuity from is around for the long haul since annuities are long-term investments. An investor should research annuity providers’ credibility, history, and credit standing.

Annuities: When They’re a Good Investment

Let’s be crystal clear. Annuities are insurance products. This means you buy it to mitigate some of the investment risks.

At the same time, not all annuities are alike. With some annuities, such as variable annuities, you can choose from stocks and bonds as investment options. In other cases, they are true insurance rather than investments.

There’s one thing an annuity does extremely well. It can protect you from longevity risk. For those unfamiliar, this is the risk of living a lot longer than you expected.

Basically, annuities are ideal if you’re healthy and look forward to living a long and meaningful life. If this is the case, annuities ensure you won’t outlive your money. So, an annuity can be a wise investment if you are buying it for this reason.

The right annuity might be right for you if you know what you want out of retirement. Aside from that, you should find out how the annuity will help you achieve those goals, as well as what fees and restrictions the product has.

Having an understanding of how annuity income is taxed, what investment options are available, and how annuities work with other investments is also important to know.

A good rule of thumb for determining whether you are a good candidate for an annuity is:

Your retirement savings goal is to grow steadily at a low level of risk.
As a retiree, you want to earn interest on your nest egg in a safe manner.
In addition to your other income sources, you would like to supplement your retirement income.
Long-term investing is important.

Finally, a white paper published by the National Bureau of Economic Research states that “standard economic models of life-cycle spending patterns imply that the portfolio of a risk-averse individual should include a substantial portfolio share in life annuities as a hedge against uncertainty about the length of life.”

When viewed along with the notion that annuities are investments rather than insurance, this statement supports the notion that annuities can be a valuable addition to a balanced and diversified investment portfolio.

The Bottom Line

There is a lot of controversy surrounding annuities. But, in the end, whether an investment is a sound for a particular individual depends on various factors. At a minimum, your age, current retirement savings, and retirement goals.

In addition to their fees, annuities have some disadvantages compared to other retirement accounts. Even so, you may decide that an annuity is a smart investment option. Primarily, it may make sense if you want a lump sum distributed over a longer period of time. Or, if you have already maxed out other retirement accounts like your 401(K) or IRA.

If not, you might be better off investing elsewhere for your retirement.

FAQS

1. How can annuities be invested?

Unlike variable annuities, fixed-rate annuities offer a predetermined return determined by the insurance company. With a variable annuity, though, you determine how to invest your money within the subaccounts.

2. Do annuities have high fees?

Despite the misconception, there are some annuities with low fees. There are some annuities sold by investment companies without sales commissions or surrender charges, known as direct-sold annuities. Also, annuities can be purchased from a variety of brokerage firms at a low price. For more information, you should contact a financial advisor.

3. What are the drawbacks to annuities?

The majority of people can benefit from annuities. But they also have some drawbacks to be aware of.

The major concerns are long-term contracts, losing control over your investment, and low or no interest earned. Other possible disadvantages are the fees and complexity. In addition, annuities have fewer liquidity options, and you have to wait until age 59 ½ before withdrawing money from them.

4. What happens to my annuity after I die?

Your annuity account can be assigned a beneficiary, but doing so may come at a cost. In other annuities, the payout only lasts until you die, and payments stop after you do. Prior to investing, find out what payout options are available for beneficiaries.

5. Who shouldn’t buy annuities?

Generally, individuals seeking short-term investments to invest around frequently and those with little or no liquid assets should not purchase annuities.

Author: Deanna Ritchie

Retrieved from: entrepreneur.com

FINRA Compliance Reviewed by Red Oak: 2453982

Fixed Annuities are long term insurance contacts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Withdrawals prior to age 59-1/2 may result in a 10% IRS tax penalty, in addition to any ordinary income tax. Any guarantees of the annuity are backed by the financial strength of the underlying insurance company.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.

Licensed to help with retirement planning, life, health, dental, annuities, mortgage protection, IULs, key-person, term, whole life, universal life, and final expense.

Financial Services by Elliot Glass Coral Springs Insurance

2022-11-14

INSURANCE PROTECTION

An integral part of preparing for the future is protecting it. As your agent, I help you prepare for uncertainty and unknown. Whether you outlive your retirement, pass away unexpectedly or become disabled, we have products that help protect the life you’ve built for you and your loved ones.

RETIREMENT INCOME STRATEGIES

The key to successful retirement doesn’t require you to compromise your lifestyle or wonder if and when your nest egg will run out. As your agent, I provide a variety of options that helps you prepare for your leisure years confidently without having to sacrifice your quality of life.

BUSINESS STRATEGIES

All business owners need financial and insurance options for themselves, their employees and ensure the future security of their businesses. I help structure strategies for employees and owners to help ensure if- or when- something happens, those who own and run the business are protected.

ESTATE MANAGEMENT

Effective estate management enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they're carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.

INVESTMENT

Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. There are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snare some investors.

TAX

Understanding tax strategies and managing your tax bill should be part of any sound financial approach. Some taxes can be deferred, and others can be managed through tax-efficient investing. With careful and consistent preparation, you may be able to manage the impact of taxes on your financial efforts.

CLICK HERE FOR MORE INFORMATION