Risk Management

Balancing Growth and Protection

Protected accumulation strategies aim to strike a delicate balance between two critical objectives:

  1. Capitalizing on market upswings to grow your savings
  2. Implementing safeguards to mitigate losses during economic downturns

This dual focus allows investors to participate in market gains while establishing a safety net for turbulent times. Incorporating annuity solutions can potentially enhance your long-term financial security and peace of mind. Guarantees are subject to the claims-paying ability of the issuing carrier.  Annuities protect against market risks and limit market participation via crediting strategies.

The Power of Diversification

At the heart of protected accumulation lies the principle of diversification. This approach involves:

  • Spreading investments across various asset classes
  • Utilizing financial instruments designed to limit downside risk
  • Incorporating insurance products that offer guaranteed income features

By carefully blending these elements, investors can create a resilient portfolio capable of weathering market storms while still positioning for growth.In an era of economic uncertainty, protected accumulation solutions offer a compelling strategy for those seeking to build and preserve wealth. While challenges remain in portfolio construction, these innovative approaches provide a roadmap for navigating the complex world of modern investing.

No Commission Variable Annuities

Commission-free annuities, or no-load annuities, are retirement investment products that eliminate the traditional sales commission typically associated with annuities. These products offer several advantages:

  1. Lower costs: By removing the sales commission, these annuities generally have reduced overall expenses, potentially leading to higher investor returns.
  2. Transparency: The fee structure of commission-free annuities is often more straightforward and manageable for investors to understand.

Guarantees are subject to the claims-paying ability of the issuing carrier.  Annuities protect against market risks and limit market participation via crediting strategies.

More Tax Deferral

Tax deferral is a key feature of variable annuities that allows investors to potentially grow their savings more efficiently. Here’s how tax deferral works with variable annuities:

  1. Earnings accumulate tax-free: Any gains from investments within the variable annuity grow without being subject to current income taxes.
  2. Compound growth potential: Because taxes aren’t paid on earnings each year, more money remains invested, potentially leading to greater compound growth over time.
  3. No taxes until withdrawal: Federal taxes on income and investment gains are only paid when you withdraw or receive income payments from the annuity.

Fixed Income Complement

According to recent research from Wade Pfau, annuities can be considered another asset class that can complement or replace bonds and bond funds. Their research has shown that annuities have the potential to outperform bonds in the short term and smooth portfolio performance for long accumulation horizons.

Disclosure

Annuities are insurance products and are subject to state insurance laws and regulations.

Annuities are designed to be long-term investments and may not be suitable for all investors. Annuity guarantees are based on the claims paying ability of the insurance company. Annuities can involve charges such as administrative fees, annual contract fees, rider fees, mortality & risk expense charges and surrender charges. Early withdrawals may be subject to surrender charges and can impact annuity cash values and death benefits. Withdrawing more than the guaranteed annual withdrawal amount on an annuity with an income rider can reduce the future guaranteed annual withdrawal amounts. Taxes are payable upon withdrawal of funds. An additional 10 percent IRS penalty may apply to withdrawals prior to age 59½.

Annuities are not guaranteed by FDIC or any other governmental agency and are not deposits or other obligations of, or guaranteed or endorsed by any bank or savings association. When considering replacing or transferring out of an annuity it’s important to understand what costs may be incurred such as surrender charges, tax consequences and the loss of death and/or income benefits.

Variable annuities value will fluctuate; it is subject to investment risk and possible loss of principal; and there are costs associated with the variable investment options such as product charges.  Investors are advised to consider the investment objectives, risks, and charges and expenses of the annuity and its underlying investment options carefully before investing.

Indexed-linked variable annuity products are complex insurance and investment vehicles. Please reference the prospectus for information about the levels of protection available and other important product information. The protection level option selected in the indexed account helps protect you from some downside risk. If the negative return is in excess of the protection level selected, there is a risk of loss of principal. Protection levels that vary based on the index and term selected are subject to change and may not be available with every option. Please see the prospectus for details.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results.

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