Financial Planning AnnuitiesWhat Is a Variable Annuity

This is financial advisor, Patrick Munro,
talking about what is a variable annuity. A variable annuity, just like the word implies,
variable is Wall Street's version of what an annuity should be. What they've done is
they've taken mutual funds, which are of course variable in nature, and they've wrapped it
in a sheath of life insurance; therefore, making the benchmark of an annuity. The problem
is that mutual funds are of have the following rules attached to them.

Past performance is
no indication of future value, may lose value, and not insured by any federal government
agency. Those kind of rules are probably not the rules you should be looking for for your
retirement instrument, but you know Wall Street has the ability and the right to offer these
instruments up to the public. For more information on variable annuities, go to their website
at www.Sec.Gov; then of course click on enforcement, and then click on investor alerts, and inside
there you will see various financial instruments, but there is a tutorial from the United States
government on variable annuities; what you should know. Watch for rates, of course, also
watch for fees, watch for charges on the account that normally, fixed annuities and equity
index annuities do not have.

So make sure that you work with a licensed professional
if you're buying a variable annuity, and always have safety of your money in the front of
your mind when you're doing something like this. This is financial advisor Patrick Munro,
talking about variable annuities..

Financial Planning AnnuitiesVariable Annuity Drawbacks

This is financial adviser Patrick Munro talking
about variable annuity drawbacks. Like the word implies, variable means up and down.
Most people would like their financial future to go up, maybe stay the same for a while
in stormy times, but never go down. That is the inherent problem with variable annuities.
The other problem is, variable annuities are comprised of mutual funds. Mutual funds of
course have fund managers that have to make decisions and sometimes they're the wrong
ones for you as a fund holder, and if that happens, the fund will go down.

Typically
mutual fund managers also have expenses to manage your money. Those expenses come out
of your investment before you get any return. There are other fees to variable annuities,
such as an M & E charge. M & E stands for mortality and expense charge, as well.

It's
essentially a fee for dying. Also, you have in addition to the fees of the mutual fund
you also have internal rates of returned fees, there's also principal protection riders,
where, there if the market was to go down and it ties your money up over an extended
period of time. For more information on variable annuities and the risks that are associated
with them, go on the web to www.Sec.Gov, click on enforcement, then click on investor alerts,
and you'll see variable annuities, what you should know, and it's a tutorial about variable
annuities and some of the risk associated therein. I'm financial adviser Patrick Munro..

Financial Planning AnnuitiesTop Annuity Producers

This is financial adviser Patrick Munro talking
about top annuity producers. I happen to be a top annuity producer and I would like to
share with you how I got to that level of production. It's a situation where you have
to work with a compliant insurance company or companies as a broker. Make sure that all
your licensing is in place and of course you would basically take the time with every client
to solve as much of their financial affairs as you can using annuities as a solution.
There are groups or associations that exist one and most importantly is called the million
dollar round table.

You can google that under MDRT on the web and check out your financial
adviser to see if he is a member of the MDRT. Which stands for million dollar round table.
And if that is the case you know you are working with the very best. I've been a lifetime member
of the million dollar round table since I. Started my annuity practice in nineteen ninety
nine.

If you take care of the time and the attention of the client and you stay complaint
with the government as well as the insurance carriers, using ethics as a very important
benchmark, this is the way that you become a top annuity producer. This is Patrick Munro
financial adviser..

Financial Planning AnnuitiesStrategy for High-Interest Annuities

This is financial planner Patrick Munro talking
about strategies for high interest annuities. Well, like any financial instrument that you
want to have high interest, with high interest comes higher level of risk. Looking at our
spectrum of annuities, the highest level of risk, we'll talk about in a moment. Let's
talk about the lowest level of risk.

That would be a fixed annuity. That's a declared
interest rate, you know where you stand, normally it's just above the cost of living, but at
least it's 100% safe and guaranteed by the insurance company. Next we have our equity
indexed annuities which allow you to participate in the stock market but there is no possibility
of down side risk. However, there's a cap on how much you can make on your interest
rate which is a risk premium for the protection that's offered on the down side.

Finally if
you're looking for the highest level of interest in an annuity, you'd be looking at a variable
annuity. What it is, it allows you to participate in the stock market linked returns using mutual
funds that are wrapped in a vessel of life insurance, therefore making it a definition
of an annuity. I caution you, though, that variable annuities are just that. When the
market is up, you can get a better rate of return, which is the highest interest strategy
available but the market is down, you also go down and there is normally no protection
on the way down, which means you have to make up for that difference over time.

That is
the strategy for high interest annuities. I'm financial planner Patrick Munro..

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..