When they were young, members of the baby boom generation did not do things the way their parents did. But now, as they start to retire, some may wish they could retire the way their parents did.

With greater longevity, exploding health care costs and global market volatility, baby boomers risk outliving their assets.

In the early 90s where if you had a 401(k) or a Thrift Savings Plan (TSP), you always rolled it over to an IRA in retirement and never took the company pension plan — because the stock market was such a “home run.”

Well after two big market declines in the last 10 years, retirees would love to have a “pension”. For those looking for a way off Wall Street’s roller-coaster ride, annuities may offer an attractive alternative. Annuities are contracts with insurance companies. The contracts, which can be funded with either with a lump sum or through regular payments, are designed as financial vehicles for retirement purposes. In exchange for premiums, the insurance company agrees to make regular payments — either immediately or at some date in the future. Meanwhile, the money used to fund the contract grows tax deferred. Unlike other tax advantaged retirement programs, there are no contribution limits on annuities. And annuities can be used in very creative and effective ways.

WHO MIGHT WANT TO BUY AN INDEX ANNUITY 

Anyone who wants to invest in the market but is afraid of losing any money; TAX SHELTERED ANNUITY (TSA) Last but not least is the TSA that many school teachers and hospital workers are offered in their retirement plan. The TSA really falls more into the category of a retirement plan, for the money that is invested in a TSA is done so on a monthly basis, unlike most other annuities, where the money is deposited in a lump sum. Also with a TSA, all the money is qualified money, or money that has not yet had the taxes paid on it. For our purposes, the TSA is, in most cases, a fine investment. If you have a TSA in your retirement account, just make sure that the funds are performing in a such a way that you are happy with the results.

WHY ONE WOULD PURCHASE AN ANNUITY IN A RETIREMENT ACCOUNT

One, you are under the age of 59.5, and you need access to the funds in your retirement plan and you do not want to pay the 10% penalty. By purchasing an annuity, there is a way that you can get around that 10% penalty. If this is the case, advisors may recommend an annuity be purchased within a retirement account. Two, you are approaching retirement age and you want to invest in the market but are afraid of losing money. You are willing to take a smaller profit if you are guaranteed never to lose a penny. Since the index annuity accomplishes this goal, even if it is in your IRA, it can still make sense. Why talk to Mintco Financial Team of Financial Advisors about your retirement planning? We think the most important part of financial planning is an understanding of your unique circumstances. We therefore take the time to uncover your “money personality” (a set of attitudes about money that determines what influences your decisions), clarify your financial objectives, and evaluate the current state of your finances. We then formulate plans and strategies that best fit your needs.

Call us at 813-964-7100 or 716 565 1300 or visit our website www.MintcoFinancial.com

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