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have an annuity question?
have an annuity question?

5 Overlooked Investments that Can Help You Stay Secure During Insecure Times

Have you ever had that dream where you’re standing naked in front of your class? Anxiety dreams about retirement investments can give you that same feeling, only the repercussions go far deeper than just embarrassment; your entire future could be at stake. With the meteoric rise of bitcoin and the beginning of a bear market in bonds, it can be hard to know what to invest in. Nobody wants to feel like they’re behind the times or missing out and nobody enjoys losing money. So how can you get a safe and secure retirement with ample income? Here are five often overlooked investments that can help you get that, without any gimmicks or bad dreams.

Investment #1: Term Life Insurance

What it is: Perhaps the simplest and easiest to understand, term life insurance is a contract with a life insurance company that is guaranteed to pay out a death benefit to your loved ones in the event that you pass away during a specified time period, or “term.” A term can be anywhere from 10 to 30 years. Who it’s right for: The short answer is anyone who cares about someone. This type of investment is the cornerstone for young families just starting out, especially when there is one main breadwinner responsible for providing the lion’s share of the income. For example, for as little as $48 a month, a 30-year old female can guarantee a $1 million payout for a 30-year term. Pros: Death benefits from life insurance policies are paid out tax-free, the amount of the death benefit is declared and guaranteed, and the amount of your policy payments stays the same throughout the declared term. For those who use it, it represents one of the best return on investments there is. Term life insurance is also typically the most affordable kind of life insurance you can get. Cons: If the policyholder stays living during the term, then all of the money paid into the policy is lost. What you gain is peace of mind.

Investment #2: Whole Life Insurance

What it is: An alternative to term, whole or “permanent” life insurance gives you coverage for your entire life, whether you live to 45 or 105, as long as the premiums continue to be paid. Who it’s right for: Again, this type of life insurance is for anyone who has loved ones they want to protect, but it can also provide a more secure place for risk-averse investors to grow money tax-deferred. Pros: The premium payments stay the same for as long as you live, the death benefit is guaranteed, and-bonus!- the cash value account grows at a guaranteed rate. It’s the cash value of this type of policy which gives you the investment component. You might earn annual dividends, which you can take out as cash, borrow as a loan, use to decrease your monthly premium, or purchase more coverage.   Cons: The dividend returns are not guaranteed and the monthly premium is typically higher than that of term life insurance. A 30-year old female can guarantee a $1 million payout for the rest of her life for $680 a month.

Investment #3: Immediate Annuity

What it is: Immediate Annuities are a type of life insurance contract that can turn a lump sum of money into immediate and regular income payments. Who it’s right for: If you’re retiring soon and you know the amount of your Social Security benefit alone won’t give you enough income, then an immediate annuity might be right for you. Pros: The income payment can be guaranteed for a specific period of time, such as 20 years, or it can be guaranteed for life, whether you live to 85 or 105, without having to purchase a complicated income rider. Immediate annuities might offer higher guaranteed payouts than other kinds of annuities. Also, you have the option of naming a beneficiary, and it can be one of the cheapest ways to get a retirement income. Cons: When you purchase an immediate annuity, you are said to “annuitize” that sum of money. This means that in exchange for a simplified contract, no income rider, and guaranteed income, you give up access to the sum of money. You can only spend it as monthly income. Also, be advised that some immediate annuities might stop paying benefits once the policyholder passes away. If you have questions about an immediate annuity that you own or are considering, GO HERE to have it tested to make sure you’re getting the best value for your money.

Investment #4: Deferred Annuity

What it is: A type of life insurance contract that delays the payment of a guaranteed income until the investor is ready to receive the payments. Who it’s right for: Someone who is ten or fewer years away from retirement who wants to protect the money they know they need for income, but who also wants some element of growth. Deferred annuities can also be used to grow money for loved ones, to provide a future income for a spouse, or to boost a legacy. Pros: During the accumulation phase when the annuity is growing, investors can typically earn a rate of return that is guaranteed or locked in to possibly ensure a higher income payment. With fixed indexed annuities, for example, your money earns returns via market-linked gains, and your principal is guaranteed so you can’t lose money due to market loss. The income payments can be elected for one life or two, and they can also be guaranteed for life. Deferred annuities typically offer greater flexibility in that the money does not have to be annuitized, so you might still access the lump sum if desired. Cons: Deferred annuities are one of the most complicated types of annuities and they don’t all work the same. The variable annuity, for example, can lose money in the stock market, whereas the indexed annuity provides principal guarantees. Deferred annuities also assess surrender charges, so you might not be able to access all of your money (without penalty) for a specified period of time. To have your annuity tested by an expert or to ask a question about an annuity you already own (or are considering) GO HERE.

Investment #5: Indexed Universal Life

What it is: Indexed Universal is a type of life insurance policy. It combines the benefits of whole life insurance with the benefits of an indexed product such as a fixed indexed annuity. This means it can earn returns via market-linked gains to popular indexes such as the S&P 500 or the Nasdaq 100. Who it’s right for: This investment might be perfect for anyone with inheritance money they want to protect, or for any sum of money that you don’t need right now for income but that you want to protect, all while earning a better rate of return than traditional “safe” money options. Pros: It’s fully liquid from day one with no surrender charges, the caps on gains are typically higher than that of the average annuity or bank CD, and they can leverage your money for your loved ones, providing a tax-free death benefit. Cons: To take advantage of this investment, you need to have access to non-qualified funds, and you must qualify. To find out if this often overlooked opportunity is right for you, give us a call at (888) 440-2468, or watch this video to learn more. Got questions? We’re happy to help, no strings attached. Just tell us what your question is, and one of our team members will personally get back to you with an answer, usually within 24 hours. We look forward to hearing from you! Get Smart: 3 Investor Tips To Raise Your Retirement IQ

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