Most people plan to retire from work, not life, so having an adequate savings and income to live the life you want to means taking advantage of all the options that are available to you.
An annuity is a contract between you and an insurance company in which you make one or more payments in exchange for a future income stream in retirement. There are many different types of annuities; however, the funds in an annuity accumulate tax deferred regardless of which type you select. This benefit alone has become an attractive way to accumulate money for retirement. How do annuities work? At the most basic level, annuities have two stages: the deferral stage and the conversion stage. The deferral stage is when you open an annuity with the insurance company and fund it either by a lump sum or periodic payments called premiums. The money then is left in the annuity to accumulate over time. At the conversion stage, the insurance company begins making payments back to you from the total accumulated value of your annuity. This stage is often sometimes called the annuitization or income stage. Which annuity is right for you? When considering which annuity is right for you, it really depends on your unique situation. There are five general categories of features that we will need to sit down and discuss further, but below are the general descriptions of each: 1. Premiums
2. Accumulation
3. Type of Interest
4. Form of Payout
5. Tax Status
11/22/2012 Estate Planning MistakesBy taking the necessary steps in advance, you have a greater say in how your estate will be distributed. And isn’t that how it should be? Below are five celebrities that didn’t plan to fail, but failed to plan:
Jimi Hendrix Status: Jimi Hendrix died without a will and did not provide any guidance as to what should be done with his multimillion dollar estate. His father, Al Hendrix, became the sole heir to all of his estate; leaving out two children that Jimi had fathered out of wedlock, his brother, a girlfriend of three years, and a second woman who claimed to be his fiancée. Over 40 years later, many portions of his estate are still unsettled and have numerous lawsuits. Mistake: Never writing a will. Marlon Brando Status: Marlon Brando had discussed with his housekeeper, Angela Borlaza, that he would leave the house that she lived in for her (house was under his name) and promised her continued employment with a company he had owned. Upon his death, this led to two separate lawsuits. Mistake: Making oral promises. Heath Ledger Status: Heath Ledger had created a detailed will prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. The will was three years old leading up to his death and had left his entire estate to his parents and sister. Mistake: Not updating the will. Princess Diana Status: Princess Diana had left a will in place upon her death; naming her mother and sister as executors. She then wrote a separate “letter of wishes” in which she instructed her executors to distribute her estate to her sons and 17 grandchildren. Exactly how much and what was left to the executors’ discretion. Mistake: Assuming that executors will be fair-minded in the distribution of the estate. Michael Jackson Status: Michael Jackson had a trust in place, but never transferred his assets into the trust. A trust is set up to keep the affairs private and out of court, but with it not being fully funded, this resulted in a very public court process. Mistake: Not funding the trust properly. |
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12/11/2012
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