Why Annuities? Are the words - Safety, Security, Guarantees, Predictability, Peace of mind, Privacy and Risk-Free important to you? Annuities provide all of these things and more Simple definition of an Annuity: An income stream FREEDOM EQUITY GROUP
Why Annuities?Are the words - Safety, Security, Guarantees, Predictability, Peace of
mind, Privacy and Risk-Free important to you?
Annuities provide all of these things and more
Simple definition of an Annuity: An income stream
FREEDOM EQUITY GROUP
FEG: Annuities
History of Annuities• In the history of America there has not been a dime lost in
any annuity contract• Annuities have a rich colorful history tracing back to the
Roman Empire – soldiers received annuity payments as compensation for military service• Annuities crossed the Atlantic to America in the mid-1700’s • One of our founding fathers – Ben Franklin – gave the cities
of Boston and Philadelphia an annuity in his will
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
History of Annuities• Franklin’s “Boston Annuity” continued to pay out until the
early 1990’s when the city opted to stop receiving payments and took a lump sum distribution of the remaining balance• Even Babe Ruth, the “Great Sultan of Swat” recognized the
value of annuity contracts, avoiding the stock market by purchasing annuities allowed him to miss out on the stock market crash in 1929
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
History of Annuities• While the Great Depression played out in front of them, the annuity
checks continued to come in – and they did not stop when Babe died in 1947, but continued to pay out to his widow until her death many years later in 1976• When UPI sports editor Milton Richmond asked Ruth to name the
smartest move he ever made, the Bambino’s answer was Buying an Annuity
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Why Consider an Annuity?•Wouldn’t it be wise to protect and preserve what it has taken you a lifetime to accumulate?
•You have car insurance, property insurance, health insurance, and every other kind of insurance, wouldn’t it be wise to insure your retirement funds?
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Five Advantages of an Annuity
1. Privacy2. Bypass Probate3. Incontestability4. Earned Interest = 3 Ways5. Tax Deferral
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
1. Privacy• Your funds are not public knowledge• Creditor Proof - Examples: OJ Simpson, Ken Lay (Enron) and
others• Interest earnings legally not reported on Federal or State
income tax returns• Acts as “poor man’s” trust
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
2. Bypass Probate• Expedites transfer of your funds• Your funds will pass immediately to your named beneficiaries• Avoids legal fees, court cost, and considerable time delays
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
3. Incontestability• Unlike a will, no one can contest your decision as to who will
receive your funds
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
4. Earned Interest in 3 Ways• Earn interest on your principal• Earn interest on your interest• Earn interest on the funds you would have normally paid to
the State and Federal government
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
5. Tax Deferral - Unlimited•Why pay taxes on interest income unnecessarily?• It is your legal right to choose when, or if during your
lifetime, to pay “Income Tax” on your interest income• 90% of annuity contracts are “passed on” to the beneficiaries
and never annuitized (no withdrawals taken)
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Accessibility to your Money• Penalty free withdraws, most offer 7% to 10% per year• Options for nursing home riders• The key to create a fixed monthly income you can never
outlive• Creating your own “personal pension”
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Advantages of Fixed Indexed Annuities• No market risk - Indexed• Takes away the nightmare of volatility in the market –
removes stress• Depression proof - guaranteed interest rates• You will never earn less than the guaranteed rate of your
contract
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Moving Qualified Funds• Do you understand the definition of Qualified Funds?• Partner A – (the individual) puts up all the funds and takes all the risk• Partner B – (Federal Government) - makes all the rules but takes none of the
risk• Partner B is $18 Trillion in debt, so which partner do you think decisions will
be made in favor of?• Partner A has to “qualify” to get access to his/her funds according to Partner
B’s rules – So whose funds are they?
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Partnership Agreement• By this agreement Partner A and Partner B enter into this
partnership agreement to share the proceeds of the partnership venture under the following conditions:• Article I – Ownership• Partner A to be 75% owner• Partner B to be 25% owner
• Article II – Investment Powers• Partner A is the custodian of the all of the partnership's assets and has
the right to make any and all investment decisions regarding said assets
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Partnership Agreement• Article III – Special Powers• Partner B is granted and hereby retains the unilateral and
irrevocable power to change Partner B’s ownership in the venture at any time, for any reason, for any amount, and Partner A by his/her signature ratifies and agrees to this special power regarding changes in ownership
Signed and executed this____ day of _____, 20___________________ __________________Signature Partner A Signature Partner B
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors
FEG: Annuities
Partnership Agreement• Review Question• If you were partner A, would you knowingly sign this agreement?• To date, no one who I have posed this partnership agreement would sign the
agreement• However UNFORTUNATELY, if you have a Qualified plan you have already
signed this agreement as Partner A• Partner B is the Federal Government whose process server is the Internal
Revenue Service (IRS)
• As you know, Congress has the power to mandate law changes (most recent tax law/rate change was an increase; January 1, 2014) including changes to the tax code and tax rates.
• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors