FOX News story
 "Fixed Index Annuities"

     CNBC - On The Money
Some good information.  Unfortunatly the moderator is clearly clueless when it comes to Fixed Annuities.

Tim Vendt
Financial Security
"Securing Your Future" 

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Annuities

Annuities can be a very important part of a retirement plan. They can help you protect your nest egg and provide an option so you won’t outlive your income. However it is important to understand that not all annuities are the same and careful attention to your particular retirement goals must be considered to determine which, if any, annuity is right for you.

Annuities can be in one of two basic phases:

1) Deferral - This is sometimes referred to as the accumulation or growth phase, because this is when an annuity primarily grows. *There can be tax advantages during this phase, because annuities grow tax deferred.

2) Annuitized - This is sometimes referred to as the pay-out phase. This is when an annuity is being used to create a structured income stream.

There are several types Annuities including:

Traditional Fixed Annuity - This type of annuity is purchased in the deferral phase and has a minimum interest guarantee. Some provide guaranteed interest higher than the minimum interest guarantee for a stated number of years.

Fixed Index Annuity - This type of annuity is purchased in the deferral phase and has a minimum interest guarantee. A unique feature of this type of annuity is that interest is primarily credited based on the performance of certain stock market indices… or another way to say it is… Stock-market linked gains without downside risk.

One of the more recent advances in Fixed and Fixed Index Annuities is “Income Riders”.  Income riders can create an income you can never outlive while still giving you some flexibility in case your situation changes.  While annuities have always had the ability to be annuitized and create an income stream you can never outlive, annuitization for the most part lacks flexibility.


Variable Annuity - This type of annuity is purchased in the deferral phase and its funds can be directly invested in the stock market. Variable Annuities are regulated as securities. The account value of a Variable Annuity can go down or deplete itself. I am not licensed to sell Variable Annuities. Because of the inherent risk of Variable Annuities I have no interest now or in the reasonably foreseeable future of becoming licensed to provide them. I only choose to provide annuities that carry contractual guarantees designed to protect your money. 

Immediate Annuity - This type of annuity is purchased in the “Annuitized” phase, meaning they immediately become a structured income stream.

Long-Term Care Annuity - This type of annuity is designed to help meet a Long-Term Care need.

Traditional Fixed & Fixed Index Annuities can have several features you and your heirs can benefit from including but not limited to:

Guarantee of principal and interest
Bonus interest
Guaranteed income for life
Stock-market linked gains without downside risk**
Income riders
Tax deferral
Penalty-free withdrawals
Full account value at death
Enhanced death benefit growth
Avoidance of probate
Refund/return of premium

**This feature is only avaialable on Fixed Index Annuities.

Annuities can be purchased with qualified funds* (IRA, Roth IRA, 401k, 403b, 457 funds, etc.) as well as non-qualified funds. It is up to you to decide which of your holdings would be best served to be held in an annuity. See the “Concepts” page of this website to check out some planning solutions which use annuities to accumulate, preserve, and pass on wealth &/or create an asset based income.

Before you purchase an annuity there are some items you should be aware of including, but not limited to:

Surrender Charges – Most annuities carry some sort of surrender charge if you withdraw more than the contractually stated penalty-free amount. Most often surrender charges last for a stated period of years and are usually based on some sort of declining scale.

Tax Consequences* – If you take money out of an Annuity before you are 59 ½ years old, and do not meet one of the exceptions, the IRS may impose an additional 10% tax.

Death Benefit – Most annuities waive surrender charges and pay the full account value to beneficiaries at the death of the annuitant… BUT NOT ALL DO.

Penalty-Free Withdrawals - Most annuities have some sort of penalty-free withdrawals. Quite often you can withdraw up to 10% per year penalty-free, some let you take a little more, some only let you take out the interest, some will waive all or a portion of the surrender charges after a specified period of time in a nursing home, home-health care situation, period of unemployment, or a terminal illness.

Bonus Interest – Many annuities offer extra interest on initial deposits for a stated period of time.

I hope you will find this information useful, but remember, it is designed to be basic… not all-inclusive.

The first step is to decide what you want an annuity to do for you. If you live in the state of Missouri or Arkansas and would like an more information or would just like to understand your options, fill out the "I Want Information About Annuities" form, call, or email me.

*This is based on my understanding of the current tax code. I am not licensed to and I do not give tax advice, for tax advice, contact your accountant or the IRS.

Important Money Saving Note

To figure out which companies Income Rider will provide you the highest income I have created a special tool.  After entering some basic information, the tool will instantly show me which company has the best deal for your situation.   In other words, we do the shopping for you to save you time and money.



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Enter your contact information and indicate what you are looking for. Tim Vendt will contact you as soon as possible. If you want to reach Tim right away, you can call him at the office: (417)732-4306, toll free (866)465-7317, or on his cell (417)839-7193.

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