Question: The stock market is close to it’s all time high, however some members of the media and economist are saying we are going to be having a major down turn in the economy soon. What are your feelings? from Cindy in Hill, NC.
Answer: I have been in the Financial Services business for twenty years and have watched the markets closely. I am not an economist and cannot predict what may or may not happen. People’s risk tolerances are different and a lot depends on an investor’s age and time horizon in regards to when the funds are needed. If I am speaking with someone in their 30s or 40s, about rolling over a 401K plan my advice to them is different than if I was having the same conversation with someone in their 50s or higher. If you are above age 50 and unsure if this down turn will occur, you may want to consider locking in your gains. This can be achieved with the proper utilization of Fixed and/or Index Annuities.
A Fixed Annuity provides a guaranteed rate of return for a set period of time that can range from 1-15 years. You will not receive less than 100% of your principal.
An Index Annuity allows you to benefit from the upside of the market while being protected from the downside. Because you’re being protected from the downside, most insurance companies will have a cap on how much you can earn on the upside. Often times with an Index Annuity the insurance company will add a bonus to your deposits. The bonus can range between 5 -20%. Depending on company and product the bonus will be added on your initial deposit as well as to all money placed in the account for up to seven years. Some companies have minimum deposits while others are more flexible.
Both Fixed and Indexed Annuities provide both protection and growth, and they are excellent for those who want to protect assets that they will need for retirement or would like to have their children/grandchildren inherit.
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