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Learn about Annuities from a Financial Planner in Sonoma County

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When deciding how to invest your hard earned money, it’s important that you work with a financial planner in Sonoma County to ensure that your resources are used wisely. Our team at Montgomery Taylor has great experience in this area of the marketplace and in this latest post, we’ll explain what you should know about annuities before investing.

An index annuity might be a valid alternative to stock market investment

If you’re considering investing in the stock market, you might take into consideration an index annuity as an alternative. Because, while this investment is also tied to the stock market, you’re protected against the potential downsides of market swings. If your indexed annuity is tied 60% to the S&P 500 index market, your annuity will rise 6%. There ensures complete protection against the downsides of stock market investment.

However, there are downsides

There are however several downsides of an index annuity to consider. For example, you often pay a significant penalty for withdrawing your principal early. They can also come with high commissions, which severely reduce your returns.

Immediate income annuities can provide higher payments with age

Another element to consider when investing in annuities is your age. If you’re an older person and you are not concerned with leaving behind a large nest egg for your family, you might consider immediate income annuities as an option. This is particularly the case in a high-interest rate environment. But it’s important to consider the benefits with your financial planner in Sonoma County.

Our experienced team can help you make the right decision

Annuities aren’t always the best option for every type of investor. The decision to buy an annuity should be made alongside an experienced financial planner who understands the market in Sonoma County and can help you to examine all the variables.

Our team at Montgomery Taylor has decades of experience in the financial industry. We’ve helped thousands of clients save for retirement and plan effectively for the years ahead. To discover more about annuities, call our team now.