Annuity Solutions From Malibu, CA

Most people buy annuities for the safety and the guarantees they provide, and the age group we generally see most interested in this product is the 50 and over crowd. There are four types of annuity options. There is an immediate annuity, two types of fixed annuities, and a variable annuity. Malibu Wealth Planning offers several annuity solutions from Malibu, CA, and the experts working at our office near Los Angeles and Calabasas, CA, can help you find the best annuity option for your individual circumstances.

Do you know what annuity is right for you? To help you select the best type, here are our annuity recommendations and an overview of all four kinds.

Variable Annuity

A Variable annuity grows in value by taking a risk investing in stocks and bonds by using mutual funds. This is the only type of annuity that you can lose money in. As far as fees, a variable annuity charges fees against the balance of your account for the mutual funds you’re invested in, the insurance expense, and for any rider, you may choose. It’s fair to say that most variable annuities charge a minimum of about 2% yearly on the low side to over 4% yearly on the high side. Personally, I don’t find variable annuities to be a good choice for most clients, whether they’re from Central California or somewhere else in the country.

Immediate Annuity

Like the name details, an immediate annuity does one thing. It provides a fixed guaranteed income stream like social security. The income streams from immediate annuities can be set up for your life or you and your spouse’s life. They can also be set up to pay for a determined period of years, like 5, 10, or 20 years. That’s really about it for an immediate annuity. They are very straightforward. Put money in, and take an income for a set period or for life.

Straight Fixed Annuity

This annuity solution from Malibu, CA, is just like a CD or a bond. It pays a fixed rate of interest and returns your principal at the end of the term, and generally has more liquidity than a bank CD. There are some different variations, but it’s pretty straightforward.

Our Favorite: Equity Indexed Annuity or Hybrid Annuity

It’s called a hybrid because it’s both a fixed annuity and a fixed index annuity. Meaning in any given year, you can choose a fixed rate of return like a fixed annuity or CD, but you have another choice. You can also choose a link to the stock market index and attempt to earn a return via a stock market index, which is why they are called equity-index annuities. The risk is you make nothing that year, but you lose nothing.

You do not get charged a fee against your principal. The fee is built into the product, and you don’t pay a yearly fee unless you opt for a rider. Riders, in most cases on these accounts, are not needed. Equity Index Annuities almost never beat the stock market in the years the market goes up, but again, the worst-case scenario is you lose nothing, and your balance remains.

Once they begin to approach the end of the earnings years, folks tend to get a bit more careful with their savings, as the time to make up for potential losses continues to shrink with age. For more information on the different types of annuities that exist and how they work, our annuity solutions from Malibu, CA, can help!