The Complete Guide to Investing in Annuities: How to Earn High Rates of Return Safely

Overview

Annuity investment has become an increasingly popular option for many investors each year with the market topping more than $100 billion in sales in recent years. Due to the dual nature of annuities, they can often be misunderstood and many investors looking for high return rates steer clear of them, hoping for the quick return rates that they often associate with higher risk investments. Though, as this book will show you, annuity investment done properly can be an incredibly powerful tool in helping you reach ...

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Overview

Annuity investment has become an increasingly popular option for many investors each year with the market topping more than $100 billion in sales in recent years. Due to the dual nature of annuities, they can often be misunderstood and many investors looking for high return rates steer clear of them, hoping for the quick return rates that they often associate with higher risk investments. Though, as this book will show you, annuity investment done properly can be an incredibly powerful tool in helping you reach your full financial potential without taking substantial risks.

In this book, you will learn exactly what annuities are and how they work. You will be shown all of the common misconceptions about annuities and how you can get past those and decide if annuity investment is right for you. You will learn the primary purpose of an annuity and how they can help diversify your retirement options. You also will learn which risks are immediately associated with annuities in regards to your retirement, including longevity, investment, and planning risks.

The specific elements of an annuity are laid out in striking detail, showing you how it works, what the differences are between each major type, and what you can expect from deferring annuities and immediate annuities. The pros and cons of each type and comparisons to other investment options such as CDs, mutual funds and retirement accounts will help you decide how an annuity fits into your portfolio.

Interviews with dozens of financial experts have helped us compile a comprehensive guide on everything you can imagine related to annuities. You will learn how a fixed annuity operates and what you can expect from multi-year agreements as opposed to single-year agreements or market value adjusted annuities. Index, variable, and income annuities are also described in full detail in their own chapters along with when they are the best choice and how they ideally fit into your investment strategies. You will learn how to properly structure an annuity and how to optimize your variable investments. You will be shown how to access, get out of, or convert your annuities when things change in your life and what you can expect to pay in taxes on your annuities.

Finally, you will be walked through the annuity sales process, including what you should expect from your salesman and ten essential questions you must ask before you sign any paperwork. If you are considering or preparing to purchase an annuity in anticipation of your retirement, this book is a vital tool that you cannot overlook.

Atlantic Publishing is a small, independent publishing company based in Ocala, Florida. Founded over twenty years ago in the company president’s garage, Atlantic Publishing has grown to become a renowned resource for non-fiction books. Today, over 450 titles are in print covering subjects such as small business, healthy living, management, finance, careers, and real estate. Atlantic Publishing prides itself on producing award winning, high-quality manuals that give readers up-to-date, pertinent information, real-world examples, and case studies with expert advice. Every book has resources, contact information, and web sites of the products or companies discussed.

This Atlantic Publishing eBook was professionally written, edited, fact checked, proofed and designed. The print version of this book is 290 pages and you receive exactly the same content. Over the years our books have won dozens of book awards for content, cover design and interior design including the prestigious Benjamin Franklin award for excellence in publishing. We are proud of the high quality of our books and hope you will enjoy this eBook version.

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Product Details

  • ISBN-13: 9781601382917
  • Publisher: Atlantic Publishing Group Inc.
  • Publication date: 9/30/2011
  • Pages: 288
  • Sales rank: 639,752
  • Product dimensions: 5.90 (w) x 8.90 (h) x 0.80 (d)

Table of Contents

Introduction: What is an Annuity and What Can it Do for Me? 11

A Brief Overview of Annuities and How They Can Help You Retire Safely 11

How Annuities Work 15

Annuities and You 20

Chapter I What Differentiates Annuities from Other Financial Products? 23

Annuities 23

Certificates of Deposit 25

Money Market Accounts 26

Mutual Funds 27

Exchange Traded Funds 28

Iras and Roth Iras 28

401(k) and 403(b) Plans 29

Stocks and Bonds 31

The Stock Market 32

Safety 33

Where Annuities Fit in Your Portfolio 36

Chapter 2 Making Annuities Work for You 37

Paying for an Annuity 37

Identify goals 39

When to Invest 46

Who Should Invest in an Annuity? 50

Evaluating the Worth of an Annuity 54

Things to Consider When Purchasing an Annuity 59

Chapter 3 Annuity Misconceptions 61

What is an Annuity? 61

What an Annuity is Not 64

Common Annuity Misconceptions 65

Common Annuity Mistakes 72

Key Points to Remember When Shopping for Annuities 74

Chapter 4 Fixed Annuities 75

Basic Facts 75

Advantages of Fixed Annuities 81

Disadvantages of Fixed Annuities 82

How to Tell if a Fixed Annuity is the Right Type of Annuity for Me 83

Chapter 5 Variable Annuities 85

Basic Facts 85

Evaluating Your Risk Tolerance 87

Investment Choices 88

Subaccounts 90

Investing Styles 92

Annuitizing a Variable Contract 104

How to Tell if this is the Right Type of Annuity for Me 107

Key Features of Variable Annuities 109

Chapter 6 Equity-indexed Annuities 111

Basic Facts 111

Indexing Methods 113

How to Tell if Equity-indexed Annuities Are Right for Me 122

Key Points to Remember 124

Chapter 7 Tax-sheltered Annuities 125

Who is Eligible? 125

Selecting the Right Policy 130

How to Tell if this is the Right Type of Annuity for Me 133

Things to Consider 134

Chapter 8 Product Features 135

Terminal Illness 136

Long-term Care 136

Market Value Adjustment 137

Inflation Adjustment 138

Income Enhancement 139

Increasing Your Liquidity 139

Annuity Riders Summary 141

Chapter 9 Subtypes of Annuities 143

Single Premium Annuities 144

Flexible Premium Annuities 145

Immediate Annuities 146

Deferred Annuities 148

Bonus Annuities 149

Qualified Annuities 150

Nonqualified Annuities 151

Chapter 10 Annuity Options 153

Annuities and Iras 153

Annuities as a CD 156

Income Annuities 157

Advanced Life Deferred Annuities 159

Annuities as a Tool 160

Chapter 11 Customizing your Annuity 161

Staging your Investments 161

Annuities within a Portfolio 167

Chapter12 Tax Specifications and Other Penalties 169

The Basics About Taxation 169

Internal Revenue Code Section 1035 174

Internal Revenue Code Section 408 176

Annuities and Your Taxes 179

Chapter 13 Annuities as an Insurance Product 185

Why are Insurance Agents Hounding Me About Investing? 185

Avoiding Probate 188

Annuities as a Funding Source 194

Chapter 14 Purchasing an Annuity 199

Who will I Buy an Annuity From? 200

Where Can I Buy an Annuity? 201

When Should I Buy an Annuity? 205

What do I Need to Buy an Annuity? 207

The Application Process 208

Chapter 15 Questions to Ask Your Agent 213

What will this Annuity do for Me? 214

What Kind of Annuity am I Interested in? 214

What Rate is the Company Paying on Older Annuities? 215

What is the Guaranteed Interest Rate? 215

How Strong is the Company? 216

How Long is the Free Look Period? 216

What are the Surrender Charges on Nonscheduled Withdrawals? 216

Are there Additional Fees? 217

When Will Distributions Begin? 218

How Do I Change My Policy? 218

What Riders are Available to Me? 219

What Do I Do if I Have a Complaint or Question that my Company Does not Address? 219

Chapter 16 Structuring Your Annuity 221

Retirement Planning 221

Payouts 222

Distribution Options 223

Monthly versus Annually 231

Maximizing Your Annuity's Distributions 232

Who Gets the Money? 233

Chapter 17 The Future of Annuities 235

Rates 236

Accessibility 237

Preferential Treatment 239

Living Benefits 240

Taxation 240

Longevity 241

Social Security 241

Conclusion 245

Appendix A Guaranty Associations 249

Appendix B Resources 253

Appendix C Getting the Investment Help You Need 255

Appendix D The Importance of Interest Compounding 261

Glossary 265

Bibliography 281

Author Biography 283

Index 285

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