Page 9 - Jupiter Spotlight - October '18
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Jupiter Spotlight, Page 9

      Financial Focus

      Can You Benefit From An                              A fixed annuity is an insurance product that allows you   in a taxable investment. Earnings will be taxed at your
                                                         to make a lump-sum investment and can provide insured
                                                                                                           ordinary income rate once you start taking withdrawals, and
      Annuity?                                           payments to you for a designated number of years, or for life.   withdrawals prior to age 59½  may be subject to a 10 percent
                                                         A fixed annuity guarantees a rate of interest for a stated period   federal tax penalty. (You will want to consult with your tax
      By Sally Sima Stahl                                that will be unaffected by market fluctuations. Your principal   advisor before withdrawing from your annuity.)
        Retirement isn’t cheap. You                      investment and the specified interest rate are guaranteed based     • Income for life – You can take your annuity payout as a
      may have heard that you will                       on the claims-paying ability of the issuing company.   lump sum or choose to receive payments for a set number of
      need 70 percent to 80 percent                        A fixed annuity offers some key benefits, including the   years, or for the rest of your life. Your income amount will
      of your pre-retirement income,                     following:                                        be determined by the value in your contract and your life
      but the real figure might even                       • No contribution limit – No IRS contribution limits apply   expectancy.
      be higher, depending on your                       to non-qualified annuities – that is, annuities held outside a     • Death benefit – If your annuity is still in the “accumulation”
      circumstances. And retirement                      tax-advantaged retirement plan, such as a defined benefit   phase at the time of your death (meaning you haven’t yet
      isn’t short, either – you could                    pension plan, Section 403(b) plan (TSA) or an IRA. This can   begun collecting payments), it might provide a death benefit
      spend two or three decades as                      be especially valuable if you are already close to retirement   to the beneficiary you’ve named. Typically, this lump sum
      a retiree. Taken together, these                   age and think you might be short on savings.      will be the greater of your account balance or the total of all
      factors highlight the need to                        • Tax deferred accumulation – The interest you earn is   premiums paid, although some annuities provide additional
      identify as many sources of retirement income as possible – and   tax deferred and will compound annually, meaning your   options. Be aware, though, that the death benefit may be
      one of these sources might be an annuity.          money may accumulate faster than it would if it were placed   taxable.
                                                                                                             As is the case with all investments, a fixed annuity
                                                                                                           does have some caveats. Most important, an annuity is a
                                                                                                           long-term investment – if you pull money out within the
                                                                                                           first several years after your purchase, you likely will face
                                                                                                           some prohibitive surrender charges. These charges decline
                                                                                                           each year, typically reaching zero after seven years. Such
                                                                                                           withdrawals also may be subject to a market value adjustment.
                                                                                                             One more thing to keep in mind: Different annuities come
                                                                                                           with different fees, and the higher the fee, the lower your
                                                                                                           “real” return will be. Consequently, you will want to compare
                                                                                                           fees before investing.
                                                                                                             If a fixed annuity is appropriate for your situation, you may
                                                                                                           find it can join your other income pools – Social Security,
                                                                                                           401(k), IRA, etc. – to provide you with the resources you
                                                                                                           need to enjoy the retirement lifestyle you’ve envisioned.
                                                                                                             This article was written by Edward Jones for use by
                                                                                                           your local Edward Jones financial advisor. Edward Jones,
                                                                                                           its employees and financial advisors cannot provide tax or
                                                                                                           legal advice. You should consult your attorney or qualified
                                                                                                           tax advisor regarding your situation.
                                                                                                             Call me for a free portfolio review at (561) 748-7600,
                                                                                                           Sally Sima Stahl, AAMS, 1851 W. Indiantown Road, Ste. 106,
                                                                                                           Jupiter, FL 33458.

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                                                     Celebrating 16 Years of Italian Tradition

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                         Friday, Nov 2                                   Saturday, Nov 3                               Sunday, Nov 4

                       8pm  - Turnstiles-The Ultimate                    6:30pm                          8pm                    5:45pm
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