When you buy an annuity, you are entering into a contract with the insurance company. That means you should have an idea of what you want that contract to do before you start shopping. Do you need income? How much? Do you want principal protection? For what term?  Because an annuity is a contract, you should know what the insurance company is contractually guaranteeing. If you are not happy with the contractual guarantees, you shouldn’t buy the annuity.  Schedule time with us and we can help you understand the fine print.

You should start considering an annuity when you are a few years from retirement and want to turn part of your savings into a reliable stream of guaranteed income or you want to protect your money from market loss.  Annuities make sense if you’re worried about outliving your money or want protection from stock market downturns. Annuities are especially useful to cover your basic expenses in retirement, like housing, food, and healthcare.  If you know your basic needs are met, the market downturns are less worrisome.  Annuities are safe investments, so if you are still more than 10 years from retirement, an annuity isn’t for you.  We have software to make sure you get the best interest rate or the highest income payout, guaranteed.

To buy an annuity, you work with a licensed insurance agent like My Annuity Agents, who will help you compare products from as many different insurance companies as possible.  My Annuity Agents has software to obtain quotes from all carriers to simplify this process for you while assuring you get the most for your money.

Then you decide how much money to contribute, either from your non-qualified accounts (like checking and savings), or from your qualified retirement accounts, (like your 401k or 403b). The next step is to complete the application.  We will help you with the application and the transfer of funds so there is not taxable event.  You will not pay taxes until the money is withdrawn, and you start taking payments.  Once issued, the annuity contract outlines how your money will grow and when you’ll begin receiving your guaranteed income. If you are not taking income, the contract will outline the compounding interest rate. We are here to walk you through every step of the way.

To move money from a 401(k) or other qualified retirement plan to an annuity, you can roll over your retirement funds directly into a qualified annuity contract, keeping the transfer tax deferred as long as the money goes straight from the 401(k) plan to the insurance company. This allows you to convert your retirement savings into an annuity that can provide guaranteed income for life or a competitive compounding fixed interest rate.  We will be here every step of the way and make it a seamless process for you.

Insurance company credit ratings are issued by agencies like AM Best, Moody’s, and S&P to show the financial strength and claims-paying ability of the insurer. These ratings matter because when you buy an annuity, you’re relying on the insurance company to keep its promises for years to come. For longer-term products, such as lifetime income annuities, it’s best to choose highly rated companies to maximize security. However, for shorter-term annuities, it can be reasonable to use a slightly lower-rated company if they offer better rates, since the time horizon and risk are much smaller.

Saying “annuities are bad” is like saying “cars are bad”. It really depends on the type and how you use them. Just as there are sports cars, trucks, and minivans built for different purposes, annuities come in many forms, each with unique pros and cons. Some financial planners criticize annuities because certain types have high fees, complex features, or are sold in situations where they don’t fit a client’s goals. But when matched correctly, like picking the right car for the road ahead, annuities can be a safe and effective tool for retirement planning. If you need protection or guaranteed lifetime income, annuities may be your best option. We would be happy to provide a quote for you.

A 1035 exchange (named after Section 1035 of the Internal Revenue Code) allows you to transfer funds from one annuity to another without paying taxes on any interest or gains at the time of the exchange.

Let’s say you bought an annuity 10 years ago. It’s grown in value, but it’s no longer meeting your needs. Maybe the interest rate is low, or the income options are limited. If you were to cash it out, you’d owe ordinary income taxes on the gains. But with a 1035 exchange, you can move that money directly into a new annuity, tax-deferred.

It’s like doing a trade-in on your financial vehicle except the IRS doesn’t make you pay tax when you upgrade.