Your 728 X 90 Ad Code




Financial Tip #1

Did you know?
In the past several decades tax deferred annuities have emerged as a commonly used retirement planning tool by financial advisors, investment planners, estate planning attorneys as well as CPAs/accountants. Annuities are now on the product menus at banks, brokerage houses, and other institutions offering retirement planning services. As the country’s population has aged, due to increased longevity from medical advancements and the “baby boomers” bulge, annuities have been incorporated into retirement planning as a safe way to accumulate moneys as well as the route to a guaranteed lifetime income.

 Financial Tip #2

Did You Know?

All annuities are protected by the various State Guaranty Funds. These are reserve funds maintained by the various states to safeguard the cash value of policies, up to a certain limit, in the event an issuing insurance company is unable to meet it obligations under the contracts. A state’s guaranty fund is maintained by assessing all legal reserve insurance companies selling life insurance and annuity contracts in the state, and by having back-up access to the state’s general funds in certain situations. The amounts covered are generally at least $100,000 but some states have substantially higher limits.

Financial Tip #3

Did You Know?


  • Are similar to traditional fixed annuities, except their interest is linked to an index like the S&P 500 Index.
  • Help you benefit from index growth while protecting your savings from market downturns.
  • Offer tax-deferred growth and supplemental retirement income.


Recent stock market volatility has many people looking for ways to protect and grow their savings. Fixed index annuities can protect your principal, provide higher interest crediting than conservative alternative options, and give you guaranteed lifetime income.


With a traditional fixed annuity, you agree with an insurance company to purchase an annuity contract for an initial sum of money and, in return, the insurer pays you interest at a rate they determine, subject to minimum guaranteed rates, for a set period of time. Traditional fixed annuities also provide you with the option to create guaranteed lifetime income.


  • Principal protection
  • Security from negative market performance
  • Tax deferral until you begin withdrawals or income payments begin
  • Opportunity to create guaranteed income for life
  • Most offer penalty-free access to a portion of your account value each year


With a fixed index annuity, you an choose interest crediting strategy linked to the S&P 500 index, giving you greater opportunity for growth, while still protecting you from downside risk.


Now, more than ever, fixed index annuities deserve consideration as part of your retirement strategy. No matter the economic environment, a fixed index annuity can:

  • Protect your principal from negative market fluctuations
  • Provide the opportunity for higher interest crediting than many other fixed alternatives
  • Offer tax-deferred growth
  • Create flexible options to receive retirement income for as long as you live.

Financial Tip #4

Did You Know?

A single premium whole life insurance (SPWL) can: Maximize your estate, conserve and transfer assets to the ones you love that’s free of federal income tax.

Like most people, you have spent your adult life working hard, raising children, paying down a mortgage, and funding a college education.  Along the way, you  have been fortunate enough to save some money for your  retirement years and  probably invested in safe and secure investments like certificates of deposit, savings  bonds, or money market funds. Safe yes, but taxes can inflict a terrible toll on the growth of your assets.

Today, many seniors are concerned about their children and grandchildren’s future and wish to transfer a portion of their estate to them upon their death, but are unfortunately unsure as to an effective way to do so. At the same time, many seniors are worried about a catastrophic or prolonged illness and the devastating impact it can have on their accumulated wealth.

By simply reallocating a portion of your invested assets to a Single premium life (SPWL) insurance you can:

  • Immediately increase your estate.
  • Provide beneficiaries an inheritance that’s free of federal income tax.
  • Pass money directly to beneficiaries avoiding all probate courts.
  • Have a guaranteed lifetime death benefit
  • Access your guaranteed cash values for financial emergencies
  • Receive your death benefit while living in the event of a catastrophic illness:

- —Terminal Illness

                         —-Nursing Home Confinement

                         —-Home Health Care/Adult Day Care/Other Qualified Care

Single premium Whole Life (SPWL) Benefits:

Living Benefits

Adding the Accelerated Death Benefit Rider to your SPWL policy does not increase your premium, and you are able to accelerate a portion of the policy’s death benefit in the  event of the insured suffering a catastrophic illness. These valuable living benefits can be exercised if any of the following occur:

  • Terminal illness
  • Permanent confinement to a nursing home/long-term care facility
  • Extended home health care/adult day care
  • Other qualified care

Liquidity Features

  • Cash values accumulate income-tax deferred year after year
  • A portion of your accumulated values can be accessed at any time the policy  has been in force for one year, through a partial surrender or policy loan.

Other Benefits

  • Protection for your lifetime
  • Guaranteed death benefits and cash values
  • Upon policy issue, your estate increases immediately
  • Creates additional wealth that no other asset can accomplish
  • Death benefits are federal income-tax free to the beneficiary

Who is Eligible For A Single Premium Life (SPWL) Insurance?

  • Adults between the ages of 50 and 85
  • Individuals who want to maximize the size of their estate
  • Individuals who have accumulated assets specifically to leave to their children, grandchildren or a favorite charity
  • Individuals who currently own CD’s, annuities, money market instruments, and treasury securities
  • Qualification is based upon a short application and answering simple health questions.

A simplified application with a phone interview by an underwriter!

Financial Tip #5

 Do you know….

Bank CDs and Annuities are both safe vehicles for retirement savings

CDs or Annuities: Which Is the Smarter Savings Vehicle?

With interest rates near record lows, it’s tough to make your investments generate the income you need. To get the most from your money, you have to make the smartest investments you can.
For conservative investors, bank certificates of deposit are a time-tested favorite for providing income. But many people have discovered that fixed annuities seem to offer similar terms with better rates.
So which investment is the smarter way to get the income you need?
Play it safe, or safer?
Bank CDs are among the safest investments available, as they’re federally insured up to $250,000. Even if your bank fails, the FDIC will make your account whole.
By contrast, fixed annuities aren’t FDIC-insured even if you buy them at a bank. They are guaranteed by the insurance company that issues them, so it’s the company’s financial security that determines how safe they are.
There’s a risk-reward trade-off, however:

  • Lately, rates on CDs have been extremely low, with one-year CDs paying 1 percent or less. Even five-year CDs fall short of the 2 percent mark.
  • By contrast, fixed annuities offer somewhat better rates. A recent search revealed three-year fixed annuities paying more than 2 percent and longer-term annuities paying 3 percent or more.

The ups and downs of annuities
Annuities come with some other benefits as well. Unlike bank CDs, annuities generate income on a tax-deferred basis, letting you avoid paying tax on the interest until you take the money out of the annuity.
When it comes to getting timely access to your money, annuities and CDs differ. Typically, even if you need to withdraw CD money early, you can simply pay an early-withdrawal penalty equal to three to six months of interest. At 1 percent to 2 percent, that’s not usually a huge amount.
On the other hand, many annuities allow you to withdraw a small amount of your money — often up to 10 percent — without paying surrender charges, but above that, the cost can be much higher. In addition, if you’re younger than age 59 1/2, you’ll also have to pay an IRS withdrawal penalty of 10 percent of your interest.
You also have to be careful to understand the guarantees of the particular fixed annuity you choose. Some annuities only guarantee interest rates for an initial period, with rates moving up and down after that. Other annuities guarantee a rate for the entire period.
Which should you pick?
Whether a CD or an annuity is smarter for you depends on your specific financial needs. The key in deciding is to understand that despite looking similar, CDs and annuities are very different. Don’t automatically pick an annuity for its higher rates before you understand their features and obligations.

Financial Tip #6

Do you know….

Immediate Annuities: More Lifetime Income and Lower Taxes  


Many investors nearing retirement usually become risk-averse, and annuities are a great choice and often beocome a valuable investment tool. Immediate annuities, though, sometimes get a bad rap because once you buy one, you generally can’t get your principal back. However, this drawback has a silver lining: immediate annuities can provide an attractive tax break. Your Gift From the IRS  When you buy a non-qualified immediate annuity, the income you receive is based on your age, your gender, and the amount of your purchase. As money is paid to you, it is divided into two buckets: interest and principal. The interest is taxed as ordinary income, but the principal is tax-free because it is a return of your initial investment, assuming it was submitted with after-tax funds. The amount of principal returned in each payment is determined by the same factors that the annuity company uses to calculate how much income you’ll receive; it assumes that the principal will be returned to you equally over the payout period.
When you request a quote from an annuity company, it will provide an illustration that shows the percentage of each payment that is tax free. In the following example, we’ll take a look at the tax implications for a 65-year-old female in Pennsylvania, who wants a lifetime income from her $100,000 purchase.

Investment Amount $100,000
Payout Period Lifetime (18 years as per IRS)
Annual Payment $7,644
Total Payments over Life Expectancy (18 years) $137,592
Exclusion Ratio 72.7%
Note: The exclusion ratio = investment amount divided by the total payments
$100,000 / $137,592 = 72.7%

This means that $5,557.19 ($7,644 x 72.7%) of each annual payment is a tax-free return of principal, which leaves only $2,086.81 as taxable income. Payments received after 18 years will have fully taxable interest because there is no more principal to return. You can find additional information, including worksheets and tables, in IRS Publication 939.
Let’s Compare Now you need to translate that into a taxable-equivalent cash flow so you can compare an immediate annuity’s cash flow to a taxable investment’s before-tax return.
Assume, as in the above example, that you will receive $5,557.19 tax-free and you are in the 25% tax bracket. That’s like getting $7,409.59 ($5,557.19 / 0.75) before paying taxes. You would add that to the taxable amount of the immediate annuity that you also receive and get:

$7,409.59 $2,086.81 $9,496.40

The total before-tax equivalent cash flow becomes:

$9,496.40/$100,000 = 9.50% per year

Unless you buy some additional options on your annuity, once you die, the income stops and your heirs get nothing. Nevertheless, if a steady income is your main goal, it’s hard to beat an immediate annuity when you stack it up against Treasury bonds, AAA munis or high-grade corporate bonds.

     Easing the Tax Bite  Many people are not even aware of the possible income tax on their Social Security benefits. The tax on Social Security benefits depends on your total income and marital status. Form SSA-1099, which Social Security recipients should receive by January 31, shows the recipient’s total benefits. To determine how much tax you will owe, add one-half of your Social Security benefits to all other income, including tax-exempt interest. If this amount is greater than the base amount for the filing status, a part of the benefits will be taxable.
The base amounts that will cause 50% of the benefits to become taxable are:

But, according to the IRS, up to 85% of the benefits can be taxable if either of the following situations applies:

  • The total of one-half of the benefits and all other income is more than $34,000 ($44,000 if married filing jointly).
  • You are married, filing separately and lived with your spouse at any time during the year.

For additional information on the taxability of Social Security benefits, see IRS Publication 915.
Annuities can help reduce the federal income tax on your Social Security income even more than investing in tax-free municipal bonds.
The following is a continuation of the above hypothetical example of a single female taking the standard tax deduction. Let’s assume she has $100,000 to invest, that the corporate bonds and tax-free bonds each pay 5% interest, and the immediate annuity has the same payout as shown earlier.

- Scenario No.1 Scenario No.2 Scenario No.3
- Corp. Bond Interest Tax-Free Interest Imm. Annuity Interest
Interest from Bond Investment $5,000 $5,000 $2,087
Pension $25,000 $25,000 $25,000
Social Security $10,000 $10,000 $10,000
Non-Taxed Income $5,557
Total Income $40,000 $40,000 $42,644
Social Security Subject to Tax $5,350 $5,350 $3,544
Gross Income $35,350 $30,350 $30,631
Total Federal Tax $3,524 $2,774 $2,811
Net income $36,476 $37,226 $39,833
Source: Tax computations by Turbo Tax™ 2005 1040 software, using 2006 tax rates.

Compared to the corporate bond, the immediate annuity will reduce her federal tax by $713 and increase her income by $3,357 each year. And even though the income tax is $37 less with the tax-free bond, her net income is $2,607 more with the immediate annuity!
Who Should Consider an Immediate Annuity? The following checklist should help you understand the risks associated with annuities, and whether an immediate annuity may be right for you:

  • Do you have anyone who depends on you financially? If so, you might not want an immediate annuity that stops paying when you die. A payout plan that will continue to a survivor could be a better choice.
  • Do you have a long life expectancy? Annuity companies estimate how long they’ll have to pay you before you die. The longer you live, the better chance of getting more money than you put in.
  • Do you have other liquid assets? In many cases, money you put into an annuity can’t be touched, so be sure you have other funds that you can get to so you don’t end up in a bind. These could include bank accounts, mutual funds or stocks.
  • Will the annuity’s exclusion ratio lower your taxes? Check your 1040 to see whether you might even drop down to a lower bracket or reduce the amount of Social Security income that will be taxable.
  • Do you own bond mutual funds? When interest rates rise, bond funds can lose value. And when interest rates fall, your income drops. You don’t have to worry about either of those outcomes with an immediate annuity.

When This Loophole Fails You can purchase an immediate annuity with a traditional IRA or other tax-qualified retirement plan, but you’ve probably never paid tax on those funds. Therefore, money coming out of such accounts is fully taxable, and the exclusion ratio won’t apply.
The Bottom Line Tax savings should be an important consideration when comparing investments. In the case of immediate annuities, you may find that after-tax return could be greater than what is available from other conservative fixed-income investments. In addition, you can get an income that you can’t outlive.

Call 614 354-3542 or email: for more information about this or any other financial product (s).