As we near the end of January, many New Years resolutions have fallen by the wayside or have yet to be started. Taking a good look at your finances and making any necessary changes is one resolution that should not be ignored. It’s necessary to look at the current economic landscape when you are deciding what needs to be done with your personal financial plan. There are a lot of things happening right now that might affect your finances and any decision that you make. This includes potential deflation, this years Presidential election, rising interest rates and the impending DOL fiduciary rule that will be announced soon.
The Federal Reserve found that only 45% of the household net worth that was lost in the Great Recession of 2008 has been recovered. Since there are a lot of Americans who are still trying to catch up from that financial crisis, they are looking for guarantees on their income. Many people rethink their financial planning during tumultuous financial times like we’ve seen over the past 8-10 years. Insurance News Net’s Rich Lane says that fixed annuities work in any investor’s portfolio in the article “Looking Into The Annuity Crystal Ball.” Fixed annuities can be one of the best ways to create stability in your financial plan. The principal protection offered by a fixed annuity takes away the stress of following the daily stock market happenings so closely. Lane’s article listed six fixed annuity benefits that make them worth consideration in anyone’s financial plan.
Fixed annuities offer plenty of guarantees, including principal protection, guaranteed interest rates and a lifetime income stream that can be used now or be deferred for later use. There is also liquidity with fixed annuity products since clients can access some of their funds and receive an income stream to pay living expenses. There are flexible payout structures and other options with fixed annuities that allow you to use them in a way that meets your personal needs. Fixed annuities offer accumulation because you continue to receive your guaranteed interest even when markets are down. You are not taxed on your fixed annuity earnings until you start receiving income or make a withdrawal. This fixed annuity tax deferral allows for triple compounding because you earn interest on your principal, on your interest and on your tax savings. Finally, you have the benefit of diversification with fixed deferred annuities. You can turn on your income stream before or after retirement, allowing you to use your deferred fixed annuity to secure income in your later years.
If you have any questions about using fixed annuity products in your financial planning, speak with an expert to determine if these products are right for you. Fixed annuities offer the flexibility and guarantees that most other financial products lack. There is no crystal ball to see what will happen with the economy, but fixed annuities typically keep consumers moving on a healthy financial path.
Written by Rachel Summit