why annuities with feg

Why Annuities?Are the words - Safety, Security, Guarantees, Predictability, Peace of

mind, Privacy and Risk-Free important to you?

Annuities provide all of these things and more

Simple definition of an Annuity: An income stream

FREEDOM EQUITY GROUP

FEG: Annuities

History of Annuities• In the history of America there has not been a dime lost in

any annuity contract• Annuities have a rich colorful history tracing back to the

Roman Empire – soldiers received annuity payments as compensation for military service• Annuities crossed the Atlantic to America in the mid-1700’s • One of our founding fathers – Ben Franklin – gave the cities

of Boston and Philadelphia an annuity in his will

• Benefits vary by Insurance Company, be sure to check with your agent as to specific riders and benefits availability in your state• FEG does not provide tax or legal advice, please consult your advisors

FEG: Annuities

History of Annuities• Franklin’s “Boston Annuity” continued to pay out until the

early 1990’s when the city opted to stop receiving payments and took a lump sum distribution of the remaining balance• Even Babe Ruth, the “Great Sultan of Swat” recognized the

value of annuity contracts, avoiding the stock market by purchasing annuities allowed him to miss out on the stock market crash in 1929


FEG: Annuities

History of Annuities• While the Great Depression played out in front of them, the annuity

checks continued to come in – and they did not stop when Babe died in 1947, but continued to pay out to his widow until her death many years later in 1976• When UPI sports editor Milton Richmond asked Ruth to name the

smartest move he ever made, the Bambino’s answer was Buying an Annuity


FEG: Annuities

Why Consider an Annuity?•Wouldn’t it be wise to protect and preserve what it has taken you a lifetime to accumulate?

•You have car insurance, property insurance, health insurance, and every other kind of insurance, wouldn’t it be wise to insure your retirement funds?


FEG: Annuities

Five Advantages of an Annuity

1. Privacy2. Bypass Probate3. Incontestability4. Earned Interest = 3 Ways5. Tax Deferral


FEG: Annuities

1. Privacy• Your funds are not public knowledge• Creditor Proof - Examples: OJ Simpson, Ken Lay (Enron) and

others• Interest earnings legally not reported on Federal or State

income tax returns• Acts as “poor man’s” trust


FEG: Annuities

2. Bypass Probate• Expedites transfer of your funds• Your funds will pass immediately to your named beneficiaries• Avoids legal fees, court cost, and considerable time delays


FEG: Annuities

3. Incontestability• Unlike a will, no one can contest your decision as to who will

receive your funds


FEG: Annuities

4. Earned Interest in 3 Ways• Earn interest on your principal• Earn interest on your interest• Earn interest on the funds you would have normally paid to

the State and Federal government


FEG: Annuities

5. Tax Deferral - Unlimited•Why pay taxes on interest income unnecessarily?• It is your legal right to choose when, or if during your

lifetime, to pay “Income Tax” on your interest income• 90% of annuity contracts are “passed on” to the beneficiaries

and never annuitized (no withdrawals taken)


FEG: Annuities

Accessibility to your Money• Penalty free withdraws, most offer 7% to 10% per year• Options for nursing home riders• The key to create a fixed monthly income you can never

outlive• Creating your own “personal pension”


FEG: Annuities

Advantages of Fixed Indexed Annuities• No market risk - Indexed• Takes away the nightmare of volatility in the market –

removes stress• Depression proof - guaranteed interest rates• You will never earn less than the guaranteed rate of your

contract


FEG: Annuities

Moving Qualified Funds• Do you understand the definition of Qualified Funds?• Partner A – (the individual) puts up all the funds and takes all the risk• Partner B – (Federal Government) - makes all the rules but takes none of the

risk• Partner B is $18 Trillion in debt, so which partner do you think decisions will

be made in favor of?• Partner A has to “qualify” to get access to his/her funds according to Partner

B’s rules – So whose funds are they?


FEG: Annuities

Partnership Agreement• By this agreement Partner A and Partner B enter into this

partnership agreement to share the proceeds of the partnership venture under the following conditions:• Article I – Ownership• Partner A to be 75% owner• Partner B to be 25% owner

• Article II – Investment Powers• Partner A is the custodian of the all of the partnership's assets and has

the right to make any and all investment decisions regarding said assets


FEG: Annuities

Partnership Agreement• Article III – Special Powers• Partner B is granted and hereby retains the unilateral and

irrevocable power to change Partner B’s ownership in the venture at any time, for any reason, for any amount, and Partner A by his/her signature ratifies and agrees to this special power regarding changes in ownership

Signed and executed this____ day of _____, 20___________________ __________________Signature Partner A Signature Partner B


FEG: Annuities

Partnership Agreement• Review Question• If you were partner A, would you knowingly sign this agreement?• To date, no one who I have posed this partnership agreement would sign the

agreement• However UNFORTUNATELY, if you have a Qualified plan you have already

signed this agreement as Partner A• Partner B is the Federal Government whose process server is the Internal

Revenue Service (IRS)

• As you know, Congress has the power to mandate law changes (most recent tax law/rate change was an increase; January 1, 2014) including changes to the tax code and tax rates.


why annuities with feg

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