{"id":16613,"date":"2024-02-22T16:40:28","date_gmt":"2024-02-22T22:40:28","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=16613"},"modified":"2024-02-22T16:40:28","modified_gmt":"2024-02-22T22:40:28","slug":"seizing-opportunity-is-now-is-the-time-to-invest-in-annuities","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/seizing-opportunity-is-now-is-the-time-to-invest-in-annuities","title":{"rendered":"Seizing Opportunity: Is Now Is the Time to Invest in Annuities?"},"content":{"rendered":"

With <\/b>economic uncertainties<\/b><\/a> and market fluctuations, it’s natural to feel uneasy about your financial security. However, now might be the perfect time to consider purchasing annuities to help safeguard your retirement income.<\/b><\/p>\n

Annuities are financial products that provide a stream of income payments to the holder over a specified period, typically during retirement. They are purchased with either a lump sum or through periodic payments, and in return, the annuitant receives regular payments, either for a fixed period or for the rest of their life.\u00a0<\/span><\/p>\n

Annuities can have various features and options, like fixed or variable <\/span>interest rates<\/span><\/a>, a stream of income, and death benefits. They are often used as a tool for <\/span>retirement planning<\/span><\/a> to provide a steady income stream and help mitigate the risk of outliving one’s <\/span>savings<\/span><\/a>.<\/span><\/p>\n

In this blog post, we’ll explore why annuities may be a smart <\/span>investment<\/span><\/a> choice for you, and how <\/span>Johnson Wealth and Income Management<\/span><\/a> can assist you in purchasing them and helping you secure your <\/span>financial future<\/span><\/a>.<\/span><\/p>\n

Annuities 101<\/strong><\/h3>\n

You try to protect your car, home, and your health with insurance, but are you trying to protect your retirement income? With the potential for tax-deferred growth and a guaranteed income stream, annuities can be important in helping meet your retirement objectives.<\/p>\n

So how do annuities work? Very basically, an annuity is a contract between you and an insurance company. The contract allows you to contribute money to a tax-deferred account. In return, you can get regular payments from the account as income. Many aspects of an annuity can be tailored to a buyer\u2019s specific needs. Besides choosing between a lump-sum payment or a series of payments, you can also choose when to start receiving payments. An annuity that begins paying out immediately is referred to as an immediate annuity, while one that starts at a predetermined date in the future is called a deferred annuity.<\/p>\n

The duration of the disbursements can also vary. You can choose to receive payments for a specific period or for the rest of your (or your spouse\u2019s) life. Naturally, a lifetime of payments may lower the amount per check. However, it helps ensure that you don\u2019t outlive the asset, which is an annuity\u2019s key selling point.<\/p>\n

Annuities typically have two phases: <\/strong><\/p>\n

1. Accumulation Phase \u2013 The period when the owner (or annuitant) is accumulating value in the annuity. This generally occurs before an individual retires.
\n2. Distribution Phase \u2013 The payout phase of an annuity is when the accumulated value is distributed (either in a lump sum or series of payments).<\/p>\n

Retirement Advantages of Annuities<\/strong><\/h3>\n

An important feature to consider with any annuity is its tax treatment. A significant benefit to using annuities for retirement planning is that you can put away large amounts of cash and defer paying taxes. Like a 401(k) or IRA, the growth on annuities is tax-free until funds are withdrawn. However, unlike other tax-deferred retirement accounts, there is no annual contribution limit. This is especially useful for people who are near retirement and need to catch up.<\/p>\n

Annuity buyers can take advantage of two distinct features:<\/strong>
\n1. Guaranteed lifetime income \u2013 Annuities can give you a steady stream of income for a set period or for your lifetime.
\n2. Guaranteed death benefit \u2013 An annuity can pay money directly to your beneficiaries when you die, helping them avoid a lengthy probate process.<\/p>\n

\"\"Why Buy Annuities Now?<\/b><\/h3>\n
    \n
  1. Stability in Uncertain Times: <\/b>Annuities can offer a <\/span>stream of income<\/span><\/a>, helping provide stability and peace of mind, especially during times of <\/span>economic volatility<\/span><\/a>. With fixed annuities, you’ll receive a predictable income stream regardless of market conditions, helping ensure that you can maintain your standard of living in retirement.<\/span><\/li>\n
  2. Protection Against Longevity Risk:<\/b> One of the greatest concerns for retirees is outliving their savings. <\/span>Annuities<\/span><\/a> help mitigate this risk by providing income for life, protecting you against the possibility of running out of money in retirement. With increasing life expectancy, securing a reliable income source is more crucial than ever.<\/span><\/li>\n
  3. Tax Advantages: <\/b>Annuities offer tax-deferred growth, meaning you won’t pay <\/span>taxes<\/span><\/a> on earnings until you withdraw funds. This can be advantageous for retirees seeking to maximize their retirement income and minimize <\/span>tax liabilities<\/span><\/a>.<\/span><\/li>\n<\/ol>\n

    How Annuities Can Benefit You in Retirement<\/b><\/h3>\n

    \"\"<\/p>\n