INDEX ANNUITIES:
A SAVINGS VEHICLE THAT OFFERS THE
OPPORTUNITY TO CAPTURE HIGHER INTEREST
603 N Indian River Drive, Suite 300, Fort Pierce, FL 34950
772-460-2500 www.melvillewealthmanagement.com
INDEX ANNUITIES
WHY WE'RE HERE
TODAY
To increase the earnings potential of your savings.
INDEX ANNUITIES
WHAT'S YOUR GOAL?
CAPITAL PRESERVATION ...
Preserve IRA or other retirement assets?
Move a portion of your money out
of the market to help preserve it?
IRAs and qualified plans – such as 401(k)s and 403(b)s – are already tax-deferred. Therefore, a deferred annuity should be used only to fund an IRA or qualified plan to benefit from the annuity's features
other than tax deferral.
An index annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index. The index used is a price index and does not reflect
dividends paid on the underlying stocks.
INDEX ANNUITIES
WHAT'S YOUR GOAL?
GROWTH OPPORTUNITY ...
Invest assets in savings or money markets
currently earning low or no interest?
Earn higher interest without risk?
INDEX ANNUITIES
WHAT'S YOUR GOAL?
FLEXIBILITY ...
Access to your money?
Regular income taxes will apply to the gains portion of income received, and a 10% federal penalty will also apply to any money withdrawn before age 59½. The contract may impose surrender fees if
money is withdrawn early.
INDEX ANNUITIES
WHAT'S YOUR GOAL?
RETIREMENT INCOME ...
Income starting now or in the next few years?
A guaranteed lifetime income?
All guarantees are based on the claims-paying ability of the issuer. Regular income taxes will apply to the gains portion of income received, and a 10% federal penalty will also apply to any money withdrawn
before age 59½. The contract may impose surrender fees if money is withdrawn early.
INDEX ANNUITIES
TYPES OF SAVINGS VEHICLES
Savings
Account
Money
Market
Account
Fixed
Annuity
Treasury Bond
Treasury
Fixed
Annuity
Bond
INDEX
ANNUITY
CD
INDEX ANNUITIES
WHAT IS AN INDEX ANNUITY?
Preserves principal
Additional earnings potential
Tax-deferred until distributed
INDEX ANNUITIES
HOW DOES IT WORK?
1
• Many guarantee a minimum interest rate
2
• Provides extra growth potential because
it is linked to the performance of a
particular market index
3
• Every year that the market index posts
gains, the account value grows
4
• Won't decrease in value because
the annuity locks in previous gains
Index annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and earnings potential that is linked to participation in the growth, if any, of an index or
benchmark. All guarantees are subject to the claims-paying ability of the issuing insurance company, which is solely responsible for obligations under its contracts. Regular income taxes will apply to the
gains portion of income received, and a 10% federal penalty will also apply to any money withdrawn before age 59½. The contract may impose surrender fees if money is withdrawn early.
MEET ANNE.
INDEX ANNUITIES
CASE STUDY: ANNE'S INDEX ANNUITY
Received $100,000 in life insurance proceeds
after husband's death
Wanted to grow this money for retirement
with minimal risk of loss
Purchased an index annuity linked to the S&P 500
Each year the market was up, Anne was able
to earn up to a 6% credit, and each year the
market was down, she lost nothing.
The S&P 500 is an unmanaged index of 500 widely held stocks that's generally considered representative of the U.S. stock market.
INDEX ANNUITIES
INDEX ANNUITY VS. S&P 500
This hypothetical example is for illustrative purposes only and is not intended to imply or represent a specific return on any particular investment. It also does not reflect charges or taxes associated with any
particular investment, which would reduce the total return. Past performance is not indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does
not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Example assumes withdrawals.
The participation rate determines how much of the gain in the index will be credited to the annuity. Investors will not receive any upside participation in the index above the participation rate. Investors
also do not participate in any dividends accumulated on the securities represented by the index. The interest rate cap is the maximum rate of interest
the annuity may earn in a year. The annual reset compares the change in the index from the beginning to the end of each year with declines being ignored.
INDEX ANNUITIES
HISTORICAL PERSPECTIVE
From October 17, 2007, to October 17, 2008,
the S&P 500 index lost more than 600 points.
If you had owned an index annuity during that time,
you would have lost nothing.
INDEX ANNUITIES
INDEX ANNUITIES MAKE SENSE IN ANY MARKET
No matter what the market is doing,
the index annuity always know what it's doing.
INDEX ANNUITIES
MAKES SENSE IN A BULL MARKET
Offers potential for greater returns
than traditional savings vehicles
Opportunity to capture a portion
of the gains in a rising market
Locks in those gains annually
Once gains are "locked-in," they cannot be lost
due to a subsequent decline in the index.
INDEX ANNUITIES
MAKES SENSE IN A BEAR MARKET
Annual reset re-establishes
the index point on an annual basis
Allows the annuity value to increase
as the market rebounds
It's easier for the stock index value to increase when its index
point is lower – creating greater opportunity for the next year.
INDEX ANNUITIES
LET'S GET STARTED
Help your assets capture market interest starting this year.
Guarantees are based on the claims-paying ability of the issuing company. Index annuities are long-term investments and are not suitable for all investors. Surrender charges may apply for early
withdrawal and, if made prior to age 59 1/2 may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income. Index annuities are not FDIC insured.
Theresa DeBello
Branch Operations Manager
772-460-2500
Toll-Free: 800-445-4767
[email protected]
www.MelvilleWealthManagement.com
Tracy Germano
Client Service Associate
772-460-2500
Toll-Free: 800-445-4767
[email protected]
www.MelvilleWealthManagement.com
Holly Kramer
Client Service Associate
772-460-2500
Toll-Free: 800-445-4767
[email protected]
www.MelvilleWealthManagement.com
Nancy Zehr Peavler
Registered Client Service Associate
772-460-2500
Toll-Free: 800-445-4767
[email protected]
www.MelvilleWealthManagement.com
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