Experiencing financial concerns during "the most wonderful time of the year" can make the season feel less bright. With the cost of practically everything on the rise, you could find yourself on a tighter budget than you had anticipated when you retire—and not just at the holidays.
Fortunately, there's no need to settle for a meager lifestyle akin to Bob Cratchit from "A Christmas Carol" during your golden years. Like Ebenezer Scrooge, you, too, can take steps to change your future for the better.
Give yourself the gift of financial security in retirement with a fixed indexed annuity. Here's what you should know about these popular investment products, their powerful role in a diversified retirement portfolio, and how Leonard Financial Solutions' independent advisors can help you plan for prosperity and peace of mind.
Annuities Can Provide a Guaranteed Source of Retirement Income That Makes It Easier to Enjoy the Holidays
Whether due to longevity or financial loss, running out of money in retirement is an increasingly common concern. The right annuity can alleviate these issues by providing a steady and predictable income stream. Several annuity types are available, each offering features as distinct as Santa's reindeer. Here's a brief overview of popular retirement annuities and how these financial products function.
How Annuities Work
An annuity is a contract between you, the annuitant, and an insurance company that exchanges present payments for future income. These financial products have two phases: the accumulation phase, where you pay into the contract to increase its value, and the annuitization phase, where you receive regular payments. During the accumulation period, your investment accrues interest according to the annuity type and contract terms.
Various types of annuities exist to meet wide-ranging needs. You can choose an annuity that aligns with your risk tolerance, purchase it with a lump sum or regular payments, and decide whether you only want annuitization payments for a specific period or the rest of your life.
Common retirement annuities include the following:
A fixed annuity earns a guaranteed annual interest rate set by the insurer—typically 4 to 5 percent—in the accumulation phase and provides regular payments once annuitization begins. Like certificates of deposit (CDs), fixed annuities protect your principal, shielding you from loss in down markets. However, these investment instruments offer significantly less liquidity than CDs and no growth potential, limiting your options. If you're like many of our clients, you might have more on your wish list than a fixed annuity can offer.
A variable annuity lets you direct your premiums to stocks, bonds, mutual funds, or other financial vehicles, with annual interest accrual and the contract's value determined by their performance. Variable annuities leave you subject to the whims of the market, and because they don't provide principal protection, you could lose your initial investment in a downturn. These annuities also have substantial management fees, making them too costly and risky for many retirees.
Fixed Indexed Annuities
A fixed indexed annuity blends aspects of both fixed and variable annuities while offering features that can be particularly attractive when planning for your retirement. Like variable annuities, fixed indexed annuities let you allocate your premium payments to an underlying investment, such as a stock market index, and base the annual interest earnings on its performance so you can enjoy gains in up markets. However, like fixed annuities, fixed indexed annuities are principal-protected investments, so you can't lose the money you've invested. Even if the market takes a nosedive, with a fixed indexed annuity, your interest rate is never less than zero.
Fixed Indexed Annuity Plans That Check the Boxes on Your Holiday and Retirement Investment Wish List
At Leonard Financial Solutions, clients often come to us looking for an investment that protects their principal and provides unlimited growth potential and liquidity. Though no single investment meets all three criteria, our fixed indexed annuities come close, offering superior flexibility and benefits, such as:
- Purchasing and funding flexibility. Choose to fund your annuity with a lump sum or through monthly payments.
- Principal protection. Safeguard your fixed indexed annuity from losses, even during poor performance of the underlying investment.
- Unlimited growth potential. Enjoy market gains without artificial caps limiting annual interest rates and accruals.
- Tax-deferred growth. Take advantage of unfettered interest accrual, with tax implications delayed until you initiate withdrawals or receive payments after annuitization.
- Lifetime payout options. Ensure a steady income stream throughout your retirement.
- No costly management fees. An annual fee is deducted from your account balance instead.
- Surrender fees. Pay a penalty if you cash in your fixed indexed annuity before the contract ends.
- Limited liquidity. Withdraw up to 10 percent of the annuity's value each year during the accumulation phase.
- Historical returns. Typically exceed inflation rates, protecting your gains against rising costs.
- Rider for terminal illness or long-term care. Allows annuitants diagnosed during the accumulation period to withdraw or surrender the fixed indexed annuity without penalties.
With features like principal protection, unlimited growth potential, limited liquidity, and numerous other benefits, our fixed indexed annuity plans can help you fulfill your retirement investment wish list.
Expert Guidance to Help You Plan for a Financial Future That's Merry and Bright
After working hard for decades, you likely have a good idea of what you want to do and how you want to live once you retire, but if you're like many of our clients, you might not know quite how to get there. Fortunately, you've come to the right place for assistance.
Leonard Financial Solutions understands that you only get one retirement—and you want to get it right. Our experienced financial services experts help people planning for retirement build robust portfolios of diverse investments that balance risk and growth potential, setting you on a path that empowers you to achieve your objectives.
From our office in Moorestown, New Jersey, we serve clients in all 50 states, so we're available to assist you no matter where you're located.
Our team works with investors of all levels of experience, so whether you're a seasoned investor or just getting started, we provide expert guidance to help you successfully navigate the complex retirement investment planning process. We're for you at every stage of your investment journey, so even if you're starting at square one, you can count on us to be right there with you, explaining your options and offering advice all along the way.
As independent financial advisors and annuity providers, you can have confidence that our recommendations are based on our fiduciary duty to prioritize your best interest rather than an obligation to promote a specific company's product.
How a Fixed Indexed Annuity Can Be the "Rudolph" in Your Retirement Portfolio
A fixed indexed annuity can play a pivotal role in a well-rounded retirement portfolio. We frequently recommend these investment options to clients, especially those concerned about potential financial setbacks affecting their retirement timing or the possibility of outliving their funds due to increased longevity.
With exceptional features like guaranteed lifetime income options, uncapped interest that provides the opportunity to expand your wealth, and downside protection that helps you safeguard it against losses, our fixed indexed annuities let you plan for security and stability that enables you to live the lifestyle you've envisioned when you retire.
Though fixed indexed annuities are far from the only investment you'll need to ensure a fiscally comfortable future, these instruments can serve as the "Rudolph" of your portfolio, guiding and illuminating your path to financial security in retirement.
Are you ready to find out what a fixed indexed annuity from Leonard Financial Solutions can do for your retirement portfolio? Give yourself a gift you can celebrate all year long and for years to come. Talk to one of our experts about your retirement investment needs and get the New Year off to a start you can feel good about.