Annuities- whether Fixed or Fixed Indexed, are you afraid of annuities?  Simply put, they are a financial contract between you and the writing insurance company.  I have been writing annuities for 23 years.  They can be used as a general investment vehicle or they can be the foundation for an IRA (Traditional, ROTH, SEP, or SIMPLE IRAs).  The insurance company invests your money and will typically earn a much higher return than CDs, Savings accounts, or Money Market accounts.  Upon payout or the income stage of an annuity, it can be structured to provide an income that cannot be outlived!

Traditional IRAs lessen your taxable bottom line by the contributions that you make into the IRA.  They grow tax deferred until distributions are made.

ROTH IRAs do not lessen your taxable income, but they also grow tax deferred, however, distributions are not taxed.

SEP (Simplified Employee Pension) IRAs work well for self-employed individuals that have fluctuating higher incomes and allows them to contribute, and therefore tax deduct, more than the Traditional IRA, in fact up to 25% of their compensation.

SIMPLE (Savings Incentive Matching Plans for Employees) IRAs for small business owners (101 employees or less) are a win-win for the employer and the employees.  The employer can offer a matching plan that typically will help to retain quality employees.  The employee agrees to make a monthly contribution (in the form of a salary reduction) to the SIMPLE IRA that is in their name and owned by them.  The employer then will match it dollar for dollar, up to 3% of the employee’s salary.  For the employee it lessens the monthly taxes withheld, and it lessens the payroll taxes for the employer.  If an employee chooses to not contribute, the employer has no obligation to contribute.  The SIMPLE IRAs are portable, and if the employee quits or is terminated, the contract goes with him or her.

Please contact me with any questions about Annuities as an investment account or the different types of IRAs that can be routed through annuities.  The solutions and benefits make SO much sense, especially in these uncertain times!

NOTE: Remember to always contact your tax advisor.  I am not a tax advisor, but I can help you set up what has been recommended by your tax advisor.