homepage logo

Layin’ It on the Line: Unyielding fortresses of financial safety — The impenetrable power of annuities!

By Lyle Boss - Special to the Standard-Examiner | Aug 2, 2023

Photo supplied

Lyle Boss

In a world of financial uncertainty and market turbulence, annuities stand tall as the unshakable bastions of safety and security. These powerful financial instruments offer a level of protection that is second to none, providing individuals with the ultimate shield against economic fluctuations and ensuring a reliable income stream throughout their lifetime.

At their core, annuities are designed to safeguard your hard-earned capital, offering a haven amidst the stormy seas of market volatility. With various types of annuities available, including fixed, indexed and variable, investors have the flexibility to tailor their financial strategy to match their risk tolerance and long-term goals.

Fixed annuities offer an ironclad safety feature by guaranteeing a fixed interest rate, preserving your principle and ensuring a steady return regardless of market conditions. Indexed annuities, on the other hand, combine the allure of potential market-linked gains with a vital safety net in the form of a minimum guaranteed interest rate. This powerful combination allows investors to participate in market growth without the fear of losing their initial investment.

Even in the realm of fixed indexed annuities, where returns are tied to the performance of outsourced indices, annuity providers have taken it a step further by offering optional features known as riders. These riders add an additional layer of protection, allowing investors to secure their annuity against market downturns. Riders such as income riders, long-term care riders, life insurance benefit riders and guaranteed minimum income benefits ensure that you’ll receive a certain level of income and other contractual benefits, regardless of market performance.

Moreover, annuities provide an unparalleled advantage in the realm of tax-deferred growth. By deferring taxes on earnings until withdrawal, annuity owners have the potential to accumulate wealth at a faster rate. This feature is particularly valuable for individuals seeking to create a steady income stream during retirement, as it enables them to maximize the growth of their investments while minimizing tax burdens.

In addition to pushing forward tax liability, when the funds are finally accessed, there is no look-back period for paying taxes on previous years’ earnings that were tax deferred; you only pay the actual taxes (gain over deposit) in the year of disbursement, and you control what year that will be. Plus, if the funds are removed over a specific time period, such as 10 years, the taxable gain may be spread over the payout period, further spreading out the accumulated tax liability over the payout period. This is called the exclusion ratio. Disclaimer: Make sure you fully understand how this feature works before executing the payout. There are numerous options; consult your tax expert.

In a world where financial safety is paramount, annuities rise to the challenge as impenetrable fortresses of protection. These formidable instruments grant you the peace of mind to navigate life’s uncertainties without losing sleep over your financial future.

As with any financial decision, it’s essential to work with a reputable and experienced advisor to find the annuity that aligns best with your unique needs and circumstances. They will guide you through the selection process, ensuring you have a comprehensive understanding of the terms, fees and potential benefits associated with different annuity products.

Annuities offer a level of safety and security that is unparalleled in the financial world. With their rock-solid guarantees, tax advantages and potential for a lifelong income stream, annuities serve as the ultimate protector of your financial well-being. Embrace the power of annuities and fortify your financial future with an unyielding shield of safety.

Lyle Boss, a native Utahn, is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.


Join thousands already receiving our daily newsletter.

I'm interested in (please check all that apply)