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Friday, November 13, 2009

How To Make 8% On Annuity Investments And Ten Questions You Should Before You Buy

1. Why Am I Buying It? People buy annuities to protect their savings from market downturns, to enjoy tax deferred growth, or to generate a guaranteed income for life or for some other fixed period of time. If you're not trying to achieve one or more of these goals, annuities may not be for you. 2. How Much Will My Annuity Pay Out? Your sales advisor should be able to tell you the guaranteed minimum it will pay each year, based on your initial investment and the date of your distribution. Note that if you are funding a varible annuity over time, that won't be the case. 3. How Much Will This Annuity Cost? You should know the mortality and expense charges that fund the annuity guarantees,any administrative fees, and in any fees for optional benefits. With a varible annuity, you should know the underlining expenses for the investment in your account. 4. What Are My Investment Option? When you a buy a varible annuity,you typically invest in a portfolio of stock and bond funds until you begin withdrawals. The end avalue of that portfolio will impact how much money you will actually receive. So you should be comfortable with the investments your varible annuity offers you. 5. Will My Heirs Get Back My Investment If I Die Prematurely? Buying an annuity without a death benefit means higher income for you. But if you don't vfeel good about the possibility that an insurance company will keep any portion of your premium that it hasn't paid out by the time you die, loook for an annuity with a death benefit. Most offer them. You can also choose a "joint and survivor" annuity that continues to pay out as as you or a designated second person like your spouse is alive. 6. Can I Get My Money Back If My Circumstances Change? Once you convert you account balance into a guranteed stream of income, you can only access the money on that schedule. If that's a concern, ask about options that permit additional withdrawals. 7. What Surrender Fees Apply? Most fixed or varible annuities impose surrender fees if you make withdrwals during the first several years of ownership. If that'sa concern, look for annuity with a "free corridor" that lets you withdraw some money each year without a fee. Just make sure to compare corridor terms from one provider to the next. 8. What Are The Tax Consequences Of Annutities? Annuities are tax deferred investments, but depending on your age and other circumstances, some withdrwals could jepardize your tax status. For instance, taking money out beofre 59 1/2 generally triggers a 10% federal income tax penalty. Also, any portion of your withdrawals representing investmnent earnings are taxed as oridinary income, not capital gains. 9. Can I Lose Money On This Annuity? You can lose money on any annuity that doesn't have a death benefit. But you can also lose money on a varible annuity that does not offer any minimum withdrawal or income guarantees. That's because your account valuen can go up or down based on your investment portfolio. 10. How Strong Is The Insurance Company? No matter how attractive an annuity may seem, it will prove to be a poor investment if the inssuing company isn't around to make good on its guarantees when you need them. So check out the issuer's financial strength at websites of the major rating companies. To make 8% interest on a $100,000 investment that pays $700 a month for life see www.ImmediateAnnuities.Com and www.AnnuityQuickQuote.Com