Annuities

Let’s Talk Annuities

As a form of investment, annuities are a central topic within the realm of financial planning. While annuities are commonly discussed, their benefits and potential drawbacks are not always clearly understood. Simply put, an annuity is an investment that is paid into (often in preparation for retirement) and will pay back out to the owner at a later date or a series of chosen dates in the future. The possibility to receive invested funds over a period of time in the future makes annuities an attractive option for soon-to-be retirees who are seeking a continuous source of income. Our Eagle Wealth consultants will gladly walk you through the different types of annuities, helping you decide if an annuity is a sound investment and if it aligns with the future you want to build.

Pros and Cons of Annuities

Annuities can be highly beneficial for their investors, but owners should also be aware of their potentially negative aspects. Our Eagle Wealth Consulting experts will clearly explain the advantageous and possibly undesirable aspects of annuities to determine how they could benefit your situation. Annuities are often praised for their ability to act as a complement to Social Security or pension plans, compounding the owner’s investment every year without a hefty tax bill. However, annuities could include hidden fees, including what are known as “surrender charges” if you choose to withdraw your funds prior to age 59 1/2 or so. This overview is in no way exhaustive of the various pros and cons of annuities — for more information, simply connect with one of our friendly consultants.

Tax Benefits

There are several advantages to owning an annuity, not the least of which are tax benefits. In an annuity, the investor’s money is both tax-deferred and compounded each year, which can lead to a significant accumulation of funds in a relatively short time. Moreover, there is no annual contribution limit for annuities, which is ideal for pre-retirees who are getting a late start on their retirement fund and want to grow their resources quickly. By working in direct collaboration with your accountant or tax professional, our skilled consultants can help you take advantage of the tax benefits that annuities offer if you decide that it is the right choice for you. For valuable advice on annuities and their tax benefits, speak with an Eagle Wealth consultant today.

Is An Annuity the Right Investment for You?

Ultimately, whether you should invest in an annuity or not depends on your personal financial situation and your aspirations for the future. Evaluating your retirement plan alongside our Eagle Wealth team is a fantastic first step to consider how an annuity might benefit you in the years to come. It is also helpful to consider your ideal timeline for annuity withdrawal — for example, if you plan on cashing out your investment before the age of 59 1/2, you should prepare to pay a surrender fee of 10% or more. Our reliable team will explore the effects that an annuity would have on your financial future, specifically when it comes to the possibility for compounded annual savings or fees. Trust Eagle Wealth Consulting’s excellent team to offer helpful insight on annuities and their long-term impact on your financial plan.