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If you’re currently planning for your upcoming retirement, you’re probably aware of some of the financial challenges you may face. Many retirees are concerned about whether they’ll have enough income to live comfortably in retirement and whether that income will last their entire life.
 
Investment volatility is another common concern. If the market takes a steep downturn, your savings could see a big drop in value. If you’re reliant on your savings and investments for income, you could find yourself in a difficult situation.
 
Taxes can also be a challenge in retirement. Even though you won’t be working, you could still face taxes on everything from investment gains to Social Security benefits.
 
Fortunately, you have tools and options available to help you confront these challenges. One such tool is a deferred annuity. Deferred annuities are popular investment products that allow you to contribute premiums and potentially grow those contributions for future use.
 
Some deferred annuities, called fixed annuities, have an interest rate that is set for predetermined period of time. Others, called fixed indexed annuities, have an interest rate that is tied to the performance of an underlying index, such as the S&P 500. If the index performs well, you earn more interest. If the index performs poorly, you may earn little or no interest.
 
It’s possible that a deferred annuity could make sense as part of your retirement savings mix. Here are a few reasons why a deferred annuity could be right for you:

Tax-deferral
 
You may already be familiar with tax deferral from experience with your IRA and 401k. Tax deferral is a feature that allows you to grow your assets, but not pay taxes on the growth until a later date.
 
In the case of a deferred annuity, your premiums can earn interest without any tax obligation as long as the funds stay inside the annuity contract. No taxes are due until you take a withdrawal from the annuity.
 
If you have money that is currently taxable, you could reduce your tax bill by moving some of those assets into a deferred annuity. You would still have an opportunity for growth, but without the annual tax obligation.

Downside protection
 
Growth is critical in retirement. You need growth to fund your withdrawals and support your lifestyle and also to combat inflation. However, you also may not be able to afford a substantial loss in the markets.
 
A deferred annuity could be one way to get growth without risking loss. As mentioned, a fixed annuity usually pays a predetermined interest rate over a set period of time. In a fixed indexed annuity, the interest rate could change from year-to-year based on the performance of an index.
 
In either case, you will likely have a guaranteed* minimum interest rate, which is the least amount of interest you can earn in any given year. This number is often set between zero and three percent. That means that there is no risk of losing money due to market performance in either a fixed annuity or a fixed indexed annuity.

Income
 
Deferred annuities can also be an effective source of retirement income. In a fixed annuity, you can simply withdraw the interest from your contract as it is credited. Since the interest rate is set in advance, you know what your income will be each year. You can withdraw the interest without affecting your principal at all.
 
In a fixed indexed annuity, you don’t know what your interest rate will be each year because that rate is dependent on the index performance. However, you can select an optional feature known as a guaranteed* minimum income benefit.
 
This optional feature allows you to withdraw a certain percentage of your contract, such as five percent, on an annual basis. As long as you stay within the feature’s guidelines, your withdrawal is guaranteed* for the rest of your life, regardless of how the index performs.
 
Looking for a solution to combat taxes, market volatility, and income concerns? A deferred annuity could be the answer. However, annuities aren’t right for everyone. It depends on your unique needs and goals.
 
Ready to plan your retirement strategy? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18113 – 2018/10/8

If you ask most millennials about their planning, you’ll likely get an answer about their career, family or perhaps even a business they want to start. Millennials, generally defined as those born between the early 1980s and early 2000s, are so young that their focus is on immediate goals and challenges.
 
If you’re a millennial and you haven’t planned for retirement or other long-term goals, you still have time to do so. However, there’s one type of planning that you may not want to put off for the future. It’s estate planning, which involves a strategy for your assets and loved ones in the event of your death.
 
Granted, death may be a highly unlikely scenario at your age. Also, it’s not exactly pleasant to think about one’s own death. However, the issue is too important to ignore. That’s especially true if you have children or other dependents. Many people think estate planning is only for the wealthy or those nearing retirement. The truth is that it’s an important process for most adults. Below are a few ways in which you and your family could benefit from a simple estate plan.

Child Care
 
Perhaps one of the most important aspects of any estate plan is that it allows you to designate who will care for your children after you pass away. This is done via a will. If you die without a will, the local probate court will make all decisions on your behalf, including who will care for your children. The court may select someone you wouldn’t have chosen yourself.
 
You also may have life insurance that would go to your children upon your death. Many insurers won’t pay a death benefit to a child. Instead, the benefit may go to a court-appointed guardian, whose wishes may not align with your own. Instead, you could set up a trust on behalf of your children and make the insurance payable to the trust. That way, the money would be used the way you want.

Financial and Health Care Decisions
 
Estate planning isn’t just for what happens after you pass away. It also helps you plan for periods in which you may be disabled or physically unable to manage your own affairs. For instance, you could be involved in a dangerous accident or possibly be diagnosed with a severe illness like cancer. While these types of events aren’t likely, they do happen.
 
You can use estate planning documents such as a power of attorney or living will to guide decisions on your behalf if you’re ever incapable of making them yourself. These tools could be especially helpful if you’re single or if you have a partner but aren’t married. For instance, your power of attorney can designate a specific individual to make all your financial and health care decisions.

Digital Assets
 
If you’re like many millennials, you have some kind of digital footprint. Maybe you’re active on social media. You almost certainly have email. Maybe you’re a freelancer or entrepreneur and do much of your work online.
 
If you pass away, your family may need to access your accounts. You can create documents that provide them with specific instructions on who should access which accounts and what login information to use. This could help your family gather needed information and ease the process of settling your estate.
 
Ready to create your estate plan? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18086 – 2018/10/1