What Types of Annuities are There?
The most common type of annuity is a fixed annuity. Fixed annuities provide investors with a fixed market rate of interest for a specified number of years until the money is annuitized and payments begin to be made to the annuitant. The payments can be made monthly, quarterly, or annually and can supply the annuitant with cash flow for life, a guaranteed period, or both. Market rates for fixed annuities are typically higher than the return you would see in any money market or certificate of deposit and offer the same type of security.
Matheson, Inc. also offers its clients the option of indexed annuities. Indexed Annuities base the interest that an annuity will produce off a stock market index such as the S&P
500. Interest rates can usually increase up to 7-8% before they are cut off by a cap. However, the true beauty of an index annuity is that even if the market goes down 50%, you still get a minimum interest rate.
What are the Tax Benefits?
Money that you invest in an annuity grows tax-deferred. When you eventually make withdrawals, the amount you contributed to the annuity is not taxed, but your earnings are taxed at your regular income tax rate.
Why Life Insurance?