Annuities - The Financial Cavalry

"My annuity provides me with protected lifetime income I can’t outlive. I sleep soundly. I don't worry about money."

Income Planning with Annuities

Like anything Annuities have their time and place and for many that time is in retirement and that place is in their portfolio generating part of their income.

Retirees today face challenges unlike any before. Millions of Americans are retiring – or being forced into retirement thanks to the pandemic and economic conditions – uncertain if they’ll have enough to cover their basic living expenses in retirement. This new uncertainty has created a great time for a retirement reset – a chance to take a different look at your overall plan for retirement, and more specifically, your income in retirement.

Income planning at Cavalry puts all of the tools at your fingertips. Different types of annuities are available to include in your planning, and an expert agent will take the time to explain the details in full and fit the appropriate annuity in your plan. And if an annuity isn’t a good fit we will take the time to explain to you why and offer a better fitting solution.

Annuity Basics

An annuity is a contract in which a life insurance company promises to make a series of income payments at regular intervals in return for a lump-sum premium payment or a series of payments made by the contract owner.

Commonly used as a retirement income planning vehicle, annuities may be used during the accumulation phase pre-retirement to grow your savings or to provide a lifetime income stream when you reach retirement – which is called the Distribution phase. 

Typically annuities are intended to take a lump sum of money and convert it to a guaranteed income stream for a person’s lifetime or for a specified number of years depending on how you choose to receive it.

As part of the accumulation leading up to annuitization, an annuity allows a natural owner to enjoy tax-deferred interest growth on your money, without having to pay taxes on the interest until you actually start taking your distribution payments.

Often people choose to use an annuity for growth during the accumulation phase because of unique features available within a specific contract.

Certain annuity types, such as fixed and indexed annuities, serve as an “safe money” alternative for those who are risk adverse or who seek a return generally higher than bank products such as a Certificate of Deposit.

While indexed annuities provide market-linked growth potential through participation 

Typically annuities are purchased with a “lump-sum” payment, often a rollover from a qualified retirement account such as a 401(k), or lottery winnings, however, depending on the type of annuity, they can also be funded over a series of payments . Unless it is an Immediate Annuity, the contract will begin paying out an income stream when the policy owner elects to annuitize, it one day in the future.

Retirement annuities are optimized for income or long-term growth, and are not short-term investment strategies. These products appeal to people whose objectives including long-term financial security, diversification, retirement income and principal preservation.

Like anything else Annuities have their time and place and for many that time is in retirement and that place is in their portfolio generating income.

Retirees today face challenges unlike any before. Millions of Americans are retiring – or being forced into retirement thanks to the pandemic and economic conditions – without knowing if they’ll have enough to cover their basic living expenses in retirement. This new uncertainty has created a great time for a retirement reset – a chance to take a different look at your overall plan for retirement, and more specifically, your income in retirement.

Income planning at Cavalry puts all of the tools at your fingertips. Different types of annuities are available to include in your planning, and your agent will take the time to explain the details in full and fit the appropriate annuity in your planning. And if an annuity isn’t a good fit we will take the time to explain why and offer a better fitting solution.

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How do annuities work?

An annuity is generally a long-term investment vehicle that’s issued by a life insurance company, it is meant to protect people from the danger of outliving your savings.

Through annuitization of your contract, your purchase payments (what you contribute) are converted into periodic payments that can last you a lifetime.

Annuities can be flexible, so you’ll choose one that allows you to:

  • Invest a payment or invest over a period of time
  • Start receiving payments immediately or at some later date
  • Select a hard and fast, variable or indexed rate of return

Cavalry

*Investment advisory services offered through Core Investment Group, LLC, a Registered investment advisor firm, based in Austin, TX. Insurance services are offered through Cavalry Financial Services Company, LLC, a DBA used for marketing and tax purposes. Cavalry Financial Services Company is not owned or affiliated with Core Investment Group, LLC. Neither Cavalry Financial Services Company, nor Core Investment Group, nor its employees or advisors provide accounting or legal advice. Consult a specialist for advice in these areas.

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