So, What is Under That Shell, You Ask?
Last month we discussed how trusting your money to the turtle of an annuity is vastly superior to being vulnerable to the will and whims of the market—the stereotypical hare that races to success—and failure. As I write this article, the overall markets have fallen ten percent on average over the last two days. Last month I made generalized claims. This month I follow with more substance that will clearly show the protection to be found under the turtle shell of a modern annuity.
So, what is housed under the safe protection of a typical turtle shell? Let’s start with the fierce defense that can be mounted by your typical snapping turtle. Legend has it that the formidable foe known as the snapping turtle has seven flavors of meat under its protective shell. They supposedly taste like pork, chicken, beef, shrimp, veal, fish or goat. Somehow, the Catholic church was able to classify the turtle as seafood. Oh well. The turtle is purported to have seven flavors of meat. Below we will discuss the first seven benefits of annuities and how they serve to support a strong protective armor over your investments.
First, annuities protect you from current taxation. Taxation is like the frequent breaks that the stock market takes as you lose ground in the race towards your financial goals. Being unencumbered from regular taxation is an advantage that cannot be underestimated.
Second, all insurance companies are required to meet reserve requirements always equal to—or greater than--the withdrawal value of every annuity in their portfolio. If they cannot meet this requirement, they cannot issue annuities.
Third, the full assets of the issuing company stand behind the annuity. If an annuity was short of funds, the issuing company would be legally obligated to sell assets until they could meet their legal obligations to the annuity holder.
Fourth, most states have a state pool that covers the obligations of all companies doing business in the state, so all annuities have a second tier of backup insurance. Kansas is also one of thirty-eight states that have very strict requirements for insurance companies to fully divulge the assets in reserve of the annuities that they issue.
Fifth, annuities are in the lowest tier of investment risk due to the reasons discussed above. They fall in the same level of investment risk as FDIC insured funds even though they have considerably higher historical
returns.
Sixth, when you harness the symbiotic powers of tax deferral and compounding to increase the long-term growth of your investments, you are harnessing one of the greatest forces in the financial universe. Your
turtle is now unstoppable in the race towards the finish line. Any break in progress is just a break to lay interest-bearing eggs—yes, turtles lay eggs too!
Finally, annuities avoid the headache of probate when a loved one passes away. If you are like me, you probably don’t want to be the cause of undue mental anguish even after you are gone!
Here to help,
Glenn R. Mosher
https://www.protectingyourhealthandyourwealth.com/
