Understanding
The Benefits
Annuities can provide guaranteed* income for retirement while protecting your principal. Mundt and Associates can help you choose the right annuity to grow your money securely.
Understand the Benefits of Annuities For Retirement
The simplest definition of an annuity is an arrangement with a company or organization to receive payments on a predetermined schedule. This arrangement typically enables you to set yourself up for guaranteed* income for life. With an annuity for retirement, you protect and grow your money, and then receive monthly or annual payments as a source of income in retirement.
In essence, the type of annuity you have determines the risks involved. Certain annuities, like fixed annuities or fixed indexed annuities (FIAs), for instance, won’t experience a loss in value in the event of a stock market decline. Variable annuities, on the other hand, may lose money in the event of a market drop. Mundt and Associates can assist you in choosing a product that offers protection. This is because one of our core values is protection of principal. We also believe you should be able to earn a reasonable rate of return** on your money, which is also possible by using an FIA.
Fixed Indexed Annuities For Retirement
One advantage of using an FIA is that your money remains protected.* This is because it is not negatively affected by the stock market. Although your money isn't directly invested, the interest on an FIA is calculated based on the performance of an underlying index. This means you can benefit from a reasonable rate of return** if the market is up, but you won't lose any money* if the market drops. In order to protect your principal and interest, the insurance company keeps your money in a reserve. You are protected by the contract and the strength of the insurance company.
Phases of an Annuity
An annuity contract has two primary phases: accumulation and distribution. These are important in understanding the benefits of annuities for retirement. The accumulation phase begins as soon as your annuity contract does. At this point, your annuity's funds start to accrue interest, tax-deferred, at a reasonable rate of return** over time. The distribution phase is the point at which you can withdraw your money. You can now receive income from your annuity; you may choose to receive payments monthly, quarterly, or annually. Each contract is different, and you have options.
To learn more about your options, reach out to Mundt and Associates today.
