Investment
Year after year, the most reliable method of shaping and building your dreams has proven to be through investing. While no one can guarantee investment returns, we work with companies that have a long history of providing solid long-term results.
There are numerous investment choices available to you, including annuities and mutual funds. We can work with you to develop an investment strategy to meet your needs of today and help reach your goals of tomorrow. Of course investing in mutual funds and variable annuities involves risk, including market fluctuation, so that units when redeemed may be worth more or less than their original cost.
ANNUITIES
What is an annuity?
An annuity is a type of insurance product that provides for tax-deferred growth or an income stream. During the accumulation period of the annuity contract, investment growth is tax-deferred. The insurance company agrees to provide an income, which may be either fixed or variable in amount, for a specified period of time in exchange for a stipulated amount of money. This income guarantee is based upon the claims paying ability of the underlying insurance company.
Deferred and Immediate Annuities
There are two types of annuities - deferred and immediate. When you purchase an immediate annuity, your income begins within the year of purchase. A deferred annuity functions like an investment account that assists in accumulating money tax-deferred for future payments. Furthermore, either type can be fixed or variable. Fixed annuities offer a guaranteed rate of return for a fixed period of time. A variable annuity offers you investment choices through a selection of investment portfolios that will fluctuate in value over time. A variable annuity's return is based on the investment results of the underlying portfolios. You have the flexibility of investing in one product with multiple investment options. Both fixed and variable annuities offer tax-deferred accumulation, and flexibility in receiving income. Fixed annuities, with a guaranteed rate of return and a guaranteed return of principal, provide you with a low risk option within your investment strategy. Variable annuities offer everything from a fixed rate of return to greater risk, with the potential for greater return options.
Annuities for long-term savings
Deferred annuities allow your money to accumulate over time and grow tax-deferred several years before you start receiving payments. Deferred annuities are designed for long-term savings, such as retirement. When you start receiving income from your deferred annuity, there are several payment choices available to you. Deferred annuities may have withdrawal charges that may apply if you decide to take your money out in the first few years of the contract. There are usually provisions that allow you to access a small percentage of your funds in case of unforeseen need. Withdrawals prior to age 59 1/2 may be subject to an IRS tax penalty.
You may want to consider a deferred annuity if:
- you want to save for retirement and enjoy tax-deferred growth
- you already contribute the maximum to your 401(k), TSA, IRA or other retirement plans and you want to save more for retirement
- you are self-employed or own your business and need to set up a retirement plan
MUTUAL FUNDS
What is a mutual fund?
Imagine if you and your friends all wanted to invest your money with a similar objective in mind - long-term growth, for example. You then got together, pooled your money, and hired a professional money manager to determine the securities to buy. Each of you would own a certain share of the pool, and the value of your share would be dependent on how much you contributed combined with the fluctuating value of the securities. A mutual fund is the same thing - a pool of investments from people with a common objective, managed by a professional money manager.
Diversification
With mutual funds you can easily allocate your investment dollars among stock, bond, and money market funds. You tailor your portfolio based upon your own investment objectives and leave the research, record keeping, and buying and selling of securities to professional money managers. Besides this professional expertise, you'll have diversification - the money you invest is spread among the scores of securities the fund owns. That way, you may be cushioned if one of the securities drops in price.
Making the right choice
Still, you should select a mutual fund carefully. Although there are many mutual funds to choose from, selecting funds that match your goals doesn't have to be a daunting experience. Every fund has a clearly defined investment objective, which is explained in the fund's prospectus. So, whether your goal is to protect your principal or maximize the growth potential of your savings, you'll find that most mutual funds are managed to meet one or more of these objectives.
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We can help!
We will take the time to assist you in identifying investment objectives and find the products that meet your needs, allowing you to have an investment strategy you feel comfortable with.
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