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A top concern of seniors and retirees is the risk of outliving their
money. The SPIA insures a guaranteed lifetime income with a
refund guarantee and even inflation protection. As an independent agency
FSD Financials' goal is to
provide the highest guaranteed income from the most
secure insurance companies. As a completely independent entity, we will
provide an impartial recommendation based on pricing and carrier
Overview - GUARANTEED
INCOME FOR LIFE
WHAT IS AN IMMEDIATE ANNUITY USED FOR
Single Premium Immediate Annuity (SPIA) — is a retirement income product
that provides you, or you and your spouse, with a guaranteed income
amount for life or for a set period of time. An immediate annuity is
similar to a pension in that it provides a steady, predictable income
stream that's guaranteed to last as long as you live.
- Turn a portion of your savings into a retirement income.
- Income is guaranteed with no fluctuation and no market risk.
- Get payouts for the rest of your life or for a specific
number of years.
- Receive monthly, quarterly, semi-annual or annual payouts
deposited directly into your account.
- Take the hassle out of required distributions from IRAs.
ADVANTAGES OF IMMEDIATE
TAX FREE INCOME
Non-qualified or "after tax" monies used to purchase immediate annuity
income have something qualified plans do not. The Exclusion Ratio or
amount of the annuity payment that is not subject to income tax since it
is considered to be a return of not only interest but of original
principal also known as the "cost basis". The cost basis is the original
investment and is usually not subject to income tax when distributed
from a personal immediate annuity.
The exclusion ratio is determined by the amount of principal and
interest being returned. An account with a large amount of credited
interest will have a lower exclusion ratio than a mostly principal
For example using
sample rates from 2011, if a 60 year old male with $100,000 and a cost
basis of $50,000 purchases an annuity income for life the payment would
be $594 per month of which 29% would be tax free.
If that same 60 year old had a cost basis of $100,000 the payment is
still $594 per month however, the exclusion ratio would be 58%.
A common myth about immediate annuities is that
they offer no liquidity. Certain companies do have contracts that cannot
be changed, while many others offer some type of liquidity option. These
liquidity options allow for advances or full liquidation of the premium
OPTIONAL LIMITED BENEFITS - Must be selected at time of purchase.
- Guaranteed minimum death
benefit – the policy pays the greater of
premiums not already paid or 10% - 50% of the
- Nursing home rider
– increases payments by 50% if policy owner is
confined to a nursing home.
- Inflation protection/Cost
of living adjustment option – payments can
be guaranteed to increased by 3% a year to keep pace
Immediate Annuities have basic product groups. Within these groups are many more
guarantee income options and guarantee periods.
Money Back Guarantee
- "If I die the insurance company keeps my
money" This has been a concern of buyers of lifetime annuities, our
SPIA program solves this concern with the money back guarantee feature.
Single Life Guaranteed Income
This option provides a guaranteed income for one
persons life. There are several types of single life immediate annuities
to fit all types of income situations. The single life annuity also
offers a guaranteed return of premium incase of premature death. More
Joint Life Guaranteed Income
This option provides a guaranteed income on two
lives for as long as either annuitant is alive. When either annuitant
dies, payments continue to the survivor. The joint life annuity also
offers a guaranteed return of premium in event of premature deaths. More
Period Certain Guaranteed Income
This option provides a guaranteed income for a
specific time period. Specify 5 -50 years and the payments are
guaranteed for that time period and is not based on any life.
Deferred Start Immediate Longevity Annuity
Pick future retirement income start date and
guarantee it today! A specific income to begin on a predetermined date
in the future that is guaranteed for life, joint life or a period
Impaired Risk Age Rated Immediate
Impaired risk age rated immediate annuities are
medically underwritten and can increase client income payouts! A
retirement planning advantage.
- Inflation Protected C.O.L.A. Income
This is a life annuity with payments that increase
or decrease by a set percentage each year.
An annually compounded increase from 1% to 5%. Initial benefit can be
substantially lower than non-COLA annuities.
All clients ages 0 - 95. (Limited carriers over age 85)
Product is approved in all states. Not all options are available in all
states or for all issue ages.
Consider a fixed annuity if you want to transfer or rollover other older
retirement accounts. We can assist in rolling over old 401Ks or other
employer plans. We also assist in tax free exchanges for existing
annuities via a 1035 exchange.
Is an annuity right for you? Do you have additional liquid assets
available in case of unseen needs? Annuities should be viewed as
long-term financial instruments.
Please be aware that withdrawal charge periods
may last from 1-10 years. These features will be clearly disclosed.
However, some companies waive the withdrawal charge in the event of
nursing home, premature death or annuitization on many of their fixed
annuity products. (Annuitization covers accumulation valued to a
guaranteed income stream.
HOW TO APPLY
FSD Financial is
available to assist with the application process (M-F 8:30 am -4:30 pm PST)
- We will UPS/FedEx all paperwork with a pre-paid
return overnight envelope.
- Information provided by you on the application
kit will begin the process of issuing a contract.
- Our insurance experts will help fill out the
application kit and suitability form as answers must be complete and