Okay, we all know there are a lot of people with money sitting in CD and money market accounts that are currently yielding very little interest. With the uncertainty in the global economy, I can certainly understand why many are choosing to play it safe for the time being. Are you one of those people?
http://astfinance.wpengine.com/wp-content/uploads/2016/11/annuitystraighttalk_onwhite_Small.png 0 0 Nathaniel Pulsifer http://astfinance.wpengine.com/wp-content/uploads/2016/11/annuitystraighttalk_onwhite_Small.png Nathaniel Pulsifer2011-06-06 22:55:222018-06-08 08:41:36CD vs Annuity Idea
Would you like an alternative with more potential? For the most part I stay away from general product recommendations without knowing your specific situation, but sometimes it helps to demonstrate how annuities can be used in the proper context. This one is very simple and we’ll consider a five year time frame with a particular fixed index annuity that is currently available in the market.
This product will pay a minimum guaranteed rate of 1.5% and also allows for up to 5% interest credit if the market performs well. Let’s assume you have a CD or money market fund paying a similar minimum interest rate, which could be more or less depending on your specifics.
With an initial premium of $100,000, this annuity will return $107,728 in the absolute worst-case scenario. If the stock market returns positive in at least one year, the total yield will be even higher. And who knows, maybe you’ll win more often than that.
Now your CD or money market may have the same guaranteed base, but I’ll bet it doesn’t allow for higher yields with positive stock market performance. Not to mention the fact that the annuity allows for tax deferred growth as compared to the annual taxation of the alternatives.
The best part is that the annuity is terminated after five years so you aren’t locked in to a lengthy contract. You should know by now that I’m a big proponent of flexibility and this product provides that with enough growth potential to make it worth a closer look.
If you are interested in this product issued by an A+ rated insurance company please call or email for more information so we can see if this is a match for you.
Take care and feel free to contact me at your convenience.
Bryan J. Anderson