Financial Planning AnnuitiesHow Does an Annuity Work

This is financial planner Patrick Munro checking
in with you today about how does an annuity work? An annuity is, got several phases to
it. First we have the accumulation phase, where you put money into the instrument, or
vessel as we call it. So, if you have a vessel and you put money into it, that is going to
accumulate, in this case tax deferred. The government has set it up so that you don't
have to pay taxes up to age 70 and a half on the accumulation of that vehicle.

Then
of course, we have the distribution period. Once you're ready to take income from your
annuity you can turn on an income stream through an immediate annuity then your deferred annuity
becomes an immediate annuity over a period of ten years, twenty years, or for your entire
life. However if you choose a ten year, your check will be higher on a monthly basis, the
twenty year, it'll be mid range, and of course it's a lower amount if you choose it for a
lifetime payout. The benefit of the lifetime payout if you have genes in your family that
last a long time, you can end up receiving more money than the insurance company has
had on deposit.

So there's varied selections that you have there that's for your annuity.
This is Patrick Munro, financial adviser..

Financial Planning AnnuitiesDifferent Annuity Rates

This is financial planner, Patrick Munro,
talking to you today about different annuity rates that are available out there for those
that wish to participate in annuities. Rates are very important whenever you're shopping
as a consumer and annuities are no different. What you want to do is find out companies
that are A rated or better, and these companies compete for your business. What happens is,
they have various reserves on file with the government and because of the instruments
that they work with, some are more aggressive with rates than others.

It's important for
you to have the best rate available because of inflation right now, and in times coming
up in the future will continue to be high. So a higher rate on your annuity assures that
you're beating the cost of inflation. Working with a financial adviser that has access to
the very latest rates from the top rated insurance companies is very, very important for you
to do so. So the key is for you to check out your adviser, ask him if he has access to
the very best rates from the very best insurance companies that are out there, and you too,
will have the horsepower that's required for a successful retirement using annuities.

That's
what we have to say today about annuity rates, I'm financial planner, Patrick Munro..

Financial Planning AnnuitiesCD vs. Annuity

This is financial adviser Patrick Munro talking
about CD's (meaning Certificate of Deposit) versus annuities. The basic difference between
Certificates of Deposit, they are bank issued instruments. You give money to a bank, they
give you a piece of paper or a Certificate of Deposit which bears an interest rate. Normally
you have to pay taxes.

Currently CD's are paying, at the time of this filming, about
3 1/2% in interest. If you have to pay taxes on that 3 1/2%, you are receiving a effective
yield after taxes of about 2.9. The problem with that is inflation. Meaning your gas and
your food and various other things is running about 5%.

Annuities, on the other hand, you
are able to give an insurance company, not a bank, but an insurance company, the same
amount of money, they'll give you an annuity certificate in return. Your money is then
tax deferred. Which means you don't have to pay taxes on the internal rate of return.
So normally you are able to get a higher rate of return than inflation offers. And the only
time you have to pay taxes on it is when you take the money out.

So I always don't participate
in Certificates of Disappointment, meaning CDs, but rather work with an insurance company
in an annuity and you will have a better financial future. This is financial adviser Patrick
Munro talking about the differences between Certificates of Deposit, CDs and annuities..

Financial Planning AnnuitiesBest Pension Annuity Rates

This is financial adviser Patrick Munro talking
about best pension annuity rates. In today's world a lot of major corporations are cutting
back on inherent pension programs. Your father may have had a pension because he worked for
the company for twenty five to thirty years. Nowadays people work for a company will end
up rolling over their 401k or whatever type of investment that they've achieved in the
short period of time that they've worked for a company to a private annuity.

So it's very
key that you get the best pension annuity rates that are out there. Once you take your
package of money that you have saved from your company, short as your career may have
been. And the way to do that is to make sure that you work with a licensed professional
that will put you in front of the best insurance companies that will give you a pension. That
is to say take a large chunk of money that you've accumulated during your working career
with that company and place it into absolute safety because you don't want to lose that
money.

It took you a long time to put it together and have it grow for your future, so that
ultimately you'll take the money out in payment streams going forward. It's very important
that you have the best pension rates that are offered to you, so make sure you work
with companies that are rated A rated or better. And make sure that your financial adviser
is accredited to do that specific work. This is Patrick Munro financial adviser talking
about best pension annuity rates..

Financial Planning AnnuitiesBest Annuity Companies

I'm financial adviser Patrick Munro talking
today about how to find the best annuity companies. What you want to do, is do your research,
and insurance companies are the companies that do manage annuities. What you can do
is go on to rating services on the web. The best rating services to check out are Standard
and Poor's, you can just basically google that and get Standard and Poor's.

There's
also the Best Rating Agency, just like it sounds, Best, there's Moody's, and there's
also Fitch, F-i-t-c-h. If you find an insurance professional and he's licensed, he should
be able to provide all the ratings from the best insurance companies for you. Then you
can independently verify the ratings that you were given by the insurance commissioner
in the state that you live. Of course, you can call the insurance commissioner and verify
the company by name and they will tell you what the ratings are and if there's any problems
with that company for operating in the state that you live in.

Ratings are very important
because it shows the reserve of capital that the insurance company has for the amount of
policies and annuities that it has outstanding. The higher the rating, the higher the reserves
which means the more safety that you have using your annuities. This is Patrick Munro
talking about the very best ratings of insurance companies..

Financial Planning AnnuitiesAnnuity Broker Job Description

This is financial planner Patrick Munro talking
to you about what an annuity broker job description might be. An annuity broker is an individual
that is licensed to sell annuities to the general population. And he must be trained
to handle the wide variety of annuity products that are out there. Fixed, variable, and of
course the equity index annuities as well.

That's the type of a broker that you want
to look with to work with. The typical job description is sitting down with a financial
fact finder and working with the person that is seeking financial advice. Finding out what
their assets are, what their income requirements are in the future and what their current financial
holdings are. Then you are able to minimize risk by transferring some of the variable
assets into a fixed secure annuity format, using either the fixed equity index annuity
or a variable annuity.

That's what an annuity broker would do and this is financial planner,
Patrick Munro..

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