Why Should I Choose a Variable Annuity?

Control

Variable annuities are more popular for many investors in Colorado because they can offer larger long term growth than what fixed annuites can offer. Variable annuities combine the tax deferral benefits like traditional annuites along with investment flexibility and control.

What Are the Benefits of a Variable Annuity in Colorado?

Variable Annuities still combine the preservation of principal, greater returns and tax-deferred growth that fixed annuities offer. However, many Colorado investors prefer the control that comes with more investment flexibility.
When you pay your premiums, you have a choice of a variety of different "subaccounts", such as fixed-interest, stock, and bond options. And, you can allocate your premium how you want among these portfolios. Instead of getting fixed interest, like a traditional annuity, the value of your variable annuity is based on how your chosen subaccount portfolio performs.
Some tax benefits of variable annuities are that the taxes on all interest, dividends, and capital gains are deferred until the withdrawals are made. You then have the choice of a lump sum, fixed payout, or variable payout when you decide to receive income from your annuity. Variable annuities are also preferred for investment strategies in Colorado like asset allocation and dollar cost averaging. Because of the flexibility of variable annuities, insurance companies make it simple to fit any annuity strategy to your individual needs and income objectives.
There are many things an investor in Colorado needs to be aware of when deciding on the right annuity to fit their individual strategy. Make sure you have the help of a wise financial planner located in Colorado who can advise you of potential risks and steer you in the right direction. You may fill out the information below to have a local Colorado licensed professional give you the right advice.

Two Types of Annuities: Immediate and Deferred

Immediate Annuity

If you choose an immediate annuity, your income payments start right away (or, anytime within 12 months of purchase). You will choose whether you want guaranteed income for a specific number of years or for your entire lifetime. The insurance company will calculate the amount of each income payment based on your annuity purchase amount and your life expectancy. If you choose annuity payments for your entire lifetime, you are making a gamble and betting that you will live longer than your life expectancy.

Deferred Annuity

A deferred annuity has two phases: the accumulation phase, where you let your money grow for a while, and the payout phase. During the accumulation phase, your money will grow tax-deferred until you take it out, either as a lump sum or as a series of payments. You decide when to take income from your annuity and therefore, when to pay the taxes. Gaining increased control over your taxes is one of the key benefits of annuities. The payout phase begins when you decide to take income from your annuity. For most people, this is during retirement. As your needs dictate, you can take partial withdrawals, completely cash-out (surrender) your annuity, or convert your deferred annuity into a stream of income payments (annuitization). This last option is essentially the same as buying an immediate annuity.

Have An Expert Help You Select The Right Annuity For Your Needs

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