Benefits of Fixed Indexed Annuities

What are some of the benefits you can get by investing in fixed indexed annuities? Well one thing is you may be able to help save up for your retirement with triple compounding interest, and have it grow about 2-3 times greater than a bank CD. They can also provide a guaranteed income for life, and with so many things happening in the world, it's hard to imagine that social security will be around for much longer. So wouldn't it be smart to have a back up plan to replace a potential social security income? They can also be a good option if you are in the middle of a 401k rollover.

In the past many people had a choice of getting a safe way of making money, but not the chance of higher returns. Or they could try for those higher returns, but would also run a risk of losing a lot of their principal investment. However, with fixed indexed annuities you have a shot at both without putting your principal at any risk! Offering you a guarantee for the principal, but also a link to the market, however, even with those downturns in the market, you wouldn't lose principal.

Fixed indexed annuities may also be termed equity indexed annuities. They will provide you both features in one, a guarantee for that principal. But you can also see a fluctuation due to the market performance, but you will never lose any of your principal. You also lock in any gains that you earned in a certain period. It's definitely a solid option when you are doing a 401k rollover.

The great thing also about a fixed indexed annuity is that you can defer taxes until you've taken the money out. That means you will be able to build up more money because you can earn more on the interest. But they also can offer you at times where you can take out a certain percentage of money without a penalty being paid, usually up to 10% per year. Most other IRA's don't allow that.

With the purchase of fixed indexed annuities you will be able to have a guaranteed income that will come in for the rest of your life. There are many different annuity payments that you can choose also. It gives you plenty flexibility and is a great option during an IRA rollover or 401k rollover.

Fixed indexed annuities are possibly one of the best options when it comes to saving for retirements. It is definitely something that is well worth your time of looking into. The fixed indexed annuities definitely have a place in today's volatile market, especially during a 401k rollover.

To find out more about Fixed indexed Annuities call P&G Financial Group, Inc. at: 1-888-701-3222 or visit: [http://www.pngfinancialgroup.com].

Article Source: http://EzineArticles.com/expert/Jason_Pollington/317717

Using Life Insurance to Pay Estate Tax - Without Tying Up Cash in Premiums

While the first $10,000,000.00 a couple has can legally avoid U.S. Federal Estate Tax, much larger estates face tax bills in the millions of dollars. The rate of tax can be 40%. That is 40% of principal; not just the income on it. And it is due 9 months from the date of death.

THE PROBLEM

Families with large estates likely still have a big generational tax bill due (often in the tens of millions of dollars). That affects continuing growth of the dynasty. Where will they get that cash?

For example, many families own closely held businesses and real estate worth $100,000,000.00 or more. Tax on that might total $36,000,000.00. Of course, good planning might lessen that, but let's say that is the tax for purposes of discussion. That leaves the family $64,000,000.00 which is not bad. But where are they getting $36,000,000.00 in cash? Families will not want to sell or get mortgages on valuable, but illiquid, family businesses and long-term (perhaps generations old) real estate holdings to pay tax.

Life insurance is the classic answer to at least part of that problem. The death benefit provides cash to pay the tax. (Common planning uses Irrevocable Life Insurance Trusts to keep the death benefit out of the gross estate. That same planning works here too.)

Even if life insurance is the answer, premiums tie up cash. Again, the cash needed for premiums may be important for existing investment strategies or business working capital.

THE SOLUTION

My organization works with a gentleman who, for 20 years, has been doing nothing else but arranging transactions that solve this problem. The challenge he has mastered is putting together the team of credible and institutional players to make it happen. The plan works this way.

The insurance company (that has done this before) issues a policy contract providing the needed death benefit. An Irrevocable Life Insurance Trust drafted by the insured's lawyer owns the policy.

HOW IT WORKS

Premium overfunding helps assure the policy works. The schedule of payments assures treatment of the policy as Life Insurance under the Internal Revenue Code. A bank that also has done all this before lends that premium to the Irrevocable Life Insurance Trust. The insured does not need to sign or guarantee the loan.

Bank security for repayment is the policy itself and the cash surrender value build up. During certain years of the life of the loan some limited collateral is needed. That typically goes away as the cash surrender value catches up.

The total out-of-pocket is from interest on the loan and professional fees. Interest is flexible and after a few years capitalizes into the loan balance. This further cuts out out-of-pocket expenses.

Index Universal Life methods of producing interest grows the cash surrender value with no risk of market loss. Some of the interest grows based on performance of a stock market index. The S&P is usually among the choices for the Index.

The plan calls for a time when the loan can be paid back to the bank. Further growth of the net cash surrender value continues to support the necessary death benefit.

Arranging such a transaction is complex. So, an existing team of players is valuable to smooth out the process. Our colleague has that team. Plus, his own organization stays involved as the resulting arrangement is managed over the years.

Where it works, this is an excellent program. His minimum is a death benefit of at least $10,000,000.00. Interested parties or advisers receive a full illustration, sometimes 65 pages long. It includes a description of every working part, assumption, and the supporting data that justifies them. The parties and their advisers review and agree to the individually crafted transaction before there is ever any commitment.

All in all, this ability to finance premiums of life insurance contracts is not fancy. There is no unusual sophisticated tax structure (other than the common and widely used Irrevocable Life Insurance Trust). Some clients prefer to have this technique result in cash to fund income tax-free retirement benefits. The team can make that happen; of course, at the cost of the estate tax exclusion for the death benefits.

FOLLOW-UP

Like any other life insurance sale, an illustration can be presented with a date of birth and the total death benefit desired. An insurability exam will obviously be needed before a policy issues. Once the idea is considered attractive; fine tuning to meet individual needs and preferences can happen.

CONCLUSION

In other words, for those who qualify and suitable circumstances, there is a rather easy transaction to create cash to pay estate taxes so a dynasty can last beyond the current generation. There is no mystery or magic. The result is due to an existing, successful, team that has done it before and is in the business of doing it again.

If you want help and direction to complete your Retirement & Estate Planning, come to http://www.scottfbarnettconsulting.com for EVERYONE's RETIREMENT & ESTATE PLANNING ONLINE WORKSHOP. I guide, not just teach you, to finish the work you need to do. It is easier and when completed, you will have PEACE OF MIND knowing you, your family, and your kids are protected. I look forward to working with you.

Article Source: http://EzineArticles.com/expert/Scott_F_Barnett_J.D.,_LL.M./770701

How to Prosper During a Weak Economy

Asset Protection Associates

"Change is the law of life." John F. Kennedy

"Progress is impossible without change, and those who cannot change

their minds cannot change anything." George Bernard Shaw

I agree with both Kennedy and Shaw. Too often, we are advised to stay the course, hang on, don't make any changes and either the market will rebound or interest rates will increase. Unfortunately, most people have not recovered their losses from the stock market's high point in 2007. In 2008, when the economy faltered, investors lost an average of 38 percent of their invested money. If you were able to earn 9 percent annually on your remaining principal, it would take you approximately seven years to break even, and if you earned five percent annually, it would take more than 12 years to recover.

We as individuals and we as a country need to pursue a new path in order to prevent future losses. In light of the country's present national debt exceeding $14 trillion and hundreds of bank failures each year, one has to wonder whether or not there is any way to extricate ourselves from debt. If you are fortunate enough to be debt free and have saved money but are concerned about how to best see it grow, then you must consider a new line of thinking. Remember what Einstein said: "The definition of insanity is repeating the same thing over and over and expecting a different result."

Everyone has what I call a financial toolbox from which to choose the tool that will best serve their needs. There are two categories of tools: one type has the potential for large gains but carries the potential for large losses. The second category of financial tool provides safety of principal, you forego greater gains for preserving your principal and accept a reasonable rate of return.

In 1995, the insurance industry created a financial tool called an index annuity. It is designed to protect your principal, combat inflation, and provide a portion of market gains every year. During negative years in the economy, the index annuity holds onto everything it has accumulated, so you never lose ground. The primary advantage to this type of vehicle is that it is like a dependable car that will take you to your destination without breaking down. This means that you will arrive ahead of other vehicles that are built to take risks that cause your savings to diminish. Warren Buffet, has been quoted as stating that the first rule of investing is, "Don't lose money" and the second rule of investing is, "Don't forget rule number one."

Since 1970, there have been 14 negative years in the economy. Most economists agree that it will be several years before the economy improves. There is also widespread agreement that to help pay off our national debt, the government will raise taxes next year. That means we will have less money to save for retirement which is all the more reason to adopt a financial vehicle that allows your funds to grow tax deferred. A guaranteed principal annuity is such a vehicle. Funds deposited into a guaranteed principal annuity grow on a tax deferred basis until you are ready to use the funds. Withdrawing funds can be done in a manner that creates primarily tax-free income or tax- advantaged income.

Considering that the current economy is weak and that it will take years to recover, one must utilize an asset preservation tool that first and foremost protects savings that one has worked hard to accumulate.

Arthur Miller is the owner of Asset Protection Associates, a retirement planning and insurance firm. Asset Protection Associates is located in Highland Park, Illinois and may be reached by phone at: (847) 433-1220 or e-mail at: assetprotectionassociates@gmail.com. Visit the Asset Protection Associates website at: [http://www.assetprotectionassociates.org]

Arthur Miller is the owner of Asset Protection Associates, a retirement planning and insurance firm in Highland Park, Illinois. He specializes in retirement planning, insurance, company benefit plan analysis, transitional planning, estate planning, and family financial survivorship guidance. In addition to personal consultations, Mr. Miller conducts workshops on asset protection for corporations, organizations, and individual groups throughout the year. Mr. Miller is a member of the National Association of Insurance and Financial Advisors, the Financial Planning Association, and a licensed insurance sales producer. Asset Protection Associates is located in Highland Park, Illinois and serves clients in Chicago's North Shore and the Greater Chicago area. Asset Protection Associates may be reached by phone at: (847) 433-1220 or e-mail at:assetprotectionassociates@gmail.com. Visit the Asset Protection Associates website at: [http://www.assetprotectionassociates.org]

Article Source: http://EzineArticles.com/expert/Art_Miller/1241030