Annuities – An Effective Tool In Your Financial Planning Arsenal

Annuities can be an effective tool in your financial planning arsenal. Many clients & advisors don’t really understand Annuities and the compounding secret they hold.

With an Annuity you set aside some money so that later on, hopefully in retirement, you will receive income from for your lifetime or a certain period.

That’s a pretty simple objective you can achieve many ways. You could stuff money into a mattress, put it in savings accounts, certificates of deposits, mutual funds, stocks, bonds,real estate – whatever you can think of to invest in.


An Annuity has two powerful characteristics (among many others)making it a smart addition to most financial plans …
1. It’s very safe, because it pays an interest rate backed by an insurance company. As long as the company you choose is stable, your money is very safe. We recommend choosing a carrier with an A rating or better.

2. Earnings grow WITHOUT paying taxes! An Annuity is a tax-deferred investment, and THAT means – given the same rate of return – your money grows faster and to a larger amount compared to paying taxes each year on your interest – like with a Certificate of Deposit. Once distribution are started the taxes are paid on a portion or all of the income depending on where the original funds came from.

Please pay attention to this VERY important point … I am NOT talking about your IRA, a 401(k) or any other kind of retirement fund here. Any investment can be turned into a tax-deferred investment if it is held in a qualified retirement fund.

What I AM talking about is money you invest OUTSIDE of any qualified retirement fund. And with an Annuity THAT money can grow tax-deferred, too! That means you can contribute to your 401(k), to an IRA, to any qualified retirement fund, AND still get another tax-deferred investment using an Annuity.

For example, let’s say you put $500 a month away into a savings account at the bank. You pay taxes on the interest earned on that account each year. If that same $500 were put in an Annuity, you would NOT pay taxes on the interest earned each year. The same is true if you have money in a CD – you’re paying taxes on the interest, but wouldn’t with an Annuity.

You CAN put Annuities in a traditional or Roth IRA and get even greater benefits. But an Annuity grows tax-deferred all by itself… try getting that at the bank!

There’s a lot more to Annuities, but if you understand the basic idea of generating wealth faster by deferring taxes on your investment, then you may want to investigate adding Annuities to your portfolio.

If you are interested in learning more or discussing a specific client please contact Stephani Lucas
858-356-9368 or

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