Although IRA’s and Roth IRA’s are wonderful vehicles for retirement savings, because they generate either tax deductions or tax-free distributions, respectively, their greatest limitation stems from the restrictions on the amount of annually permitted deposits. A wise investor will also purchase a Flexible Premium Deferred Annuity for the purpose of accumulating additional retirement income and/or wealth for future generations.

PROVIDENCE PLAN ANNUITIES:

• High Interest Wealth Accumulation 
• Accelerated Returns by tax-deferral
• Income Guaranteed to Last as Long as You Do

Mt. Hoverla in Clouds

Although Traditional and Roth IRAs are wonderful vehicles for retirement, estate and other longer term savings – because they generate tax deductions or tax free distributions, respectively – their greatest limitation stems from the restrictions on the amount of annually permitted deposits. The impact of this limitation weighs heavily upon those persons whose employers do not provide an sort of qualified pension plan. A wise investor will also purchase and routinely contribute to annuities (Click for an outline of Annuity basics) for the purpose of accumulating supplemental retirement income and/or wealth for future generations.

Providence Annuities Provide High Interest Wealth Accumulation, Accelerated by Complete Tax – Deferral.

One way to save for the future and to ensure that your money lasts as long as you do is to invest in an annuity. Annuities come in many flavors, but generally fall into two categories: deferred and immediate income.

The Deferred Dream: Flexible Premium Deferred Annuities

A deferred annuity allows you to save money into and through your retirement years on a tax-deferred basis. In other words, Uncle Sam gets zip until you start withdrawing money from the account.* At that point – in retirement years – your taxable income will likely be lower, putting you in a lower tax bracket. Ultimately, this will put more of the money into your pocket than you could have put while actively earning wages and suffering the burdens of a higher tax bracket.

And by allowing your earnings to compound tax free, you will likely have much more money than if you had invested in a taxable investment such as a CD or corporate bond (Learn How Providence Plan Annuities Outperform CDs –Click Here)

Keep in mind that deferred annuities are geared toward longer term saving, so they might not be suitable for anyone who anticipates having to withdraw money before age 59.5%. However, parents or grandparents can still accumulate wealth for their children’s and grandchildren’s needs (education, student loan repayment, or otherwise) by dedicating an annuity to those needs and withdrawing funds from it on their loved ones’ behalf

Withdrawals before age 59.5 are subject to a federal excise tax of 10% on then obtaining accumulated interest income. Providence annuities have a decreasing from 6% (by 1% annually) six year surrender charge; however, that charge is waived at times of conversion into monthly payment contracts and  upon death and other defined crisis. The investor may withdraw up to 10% of his or her money surrender charge free in any given year

Deferred Annuities safeguard wealth for and through retirement.

They can also build a Lifetime Retirement Paycheck.

Of course, the accumulated wealth is also available to our investors for retirement needs. When they reach retirement years (or at any time after age 59.5), they can start withdrawing monies from annuities according to their own plan or they can convert some or all of the money into a monthly or annual source of guaranteed lifetime income, creating the peace of mind associated with a regular ”retirement paycheck. The calculation that structures this income stream guarantees that our investors will not outlive the savings that they have dedicated to retirement.

Instant Gratification: The Providence Single Premium Immediate Annuity

An immediate-income annuity is a contract that turns a single lump-sum payment of, say, $100,000.00, into a stream of lifetime income, or if you prefer, a source of income for a specific number of years. Such annuities are a good place to invest retirement bonuses, gifts and nonqualified deferred compensation payouts.

Unlike a deferred annuity, an immediate annuity is designed to meet the needs of retirees looking to generate income during their retirement years, rather than those who are still saving for retirement. People buy annuities to cover their longevity risk of superannuation – the risk of outliving their money (Click for more Information on how annuities avoid this risk).

Providence Offers Freedom of Choice

By allowing its investors the choice to convert their annuities into lifetime income contracts at any time, without any surrender charges, Providence Plans allow the investor to enjoy both instant gratification and deferred dreams.

The flexible premium aspect of a Providence Annuity allows the investor to make an initial investment of only $300 and to add to that investment at any time with deposits as low as $25. The investor is free to accumulate wealth at his own pace.

The generous conversion choices allow the investor to start a lifetime guaranteed contract at any time (or even never). That contract can be for lifetime only, for a lifetime or period of guaranteed years, whichever is longer, or simply for a period of years. The Providence investor sits in the driver seat at all times.

Model Annuity Payouts

As an illustration, assume that a husband and wife have accumulated $100,000.00 in each of their two personal annuities. With a 5% rate of ongoing interest return, they can expect to receive at either age 65 0r 70 (the longer one waits before “annuitization”, the higher the available income stream) monthly paycheck in the following amounts:

                                    Monthly income commencing at:

                                Age 65                       Age 70

Husband                   $634                           $681  

Wife:                          $606                          $656

This illustration assumes that the couple chose a lifetime income option with a guaranteed minimum 15 year payout. Should either of them predecease the time of the guarantee, their income stream will be payable to their beneficiary. A number of other choices available to Providence customers will vary the payments somewhat, depending upon retirement planning.

Providence annuities offer payment features that provide for souses after death. For one thing, spouses can assume their deceased partners’ existing annuities, as if they were their own. An investor can also opt to receive joint income with full or reduced benefits. Income annuities also offer guarantee periods for heirs in the event of a premature death.

Death Benefit

Providence Annuities allow the investor to appoint beneficiaries for their annuities. Upon their death, the entire cash value of the accumulated wealth will be paid to those beneficiaries. This then allows the investor the luxury of saving for or in retirement while still having the satisfaction that those savings will be paid to their spouses or descendants in the event of an untimely death.

CLOSING COMMENTS

Most people rely on a combination of Social Security, pensions, and personal savings to cover their retirement expenses and to help to support the needs of their children and grandchildren. In some cases, there may be a shortfall, and it is the income annuity that is the best vehicle to cover that shortfall. It will provide a guaranteed lifetime contract payment for as long as the investor lives. This is a particularly attractive option to persons who  have a stingy company pension, or who might have no pension at all.