Annuities are flexible insurance contracts that are designed to provide income as well as meet long-term savings goals. As an investor, you may find the key to tax control is annuities. All earnings in an annuity grow tax-deferred until withdrawn.* This means your money works harder without the drain of current taxes. In most cases, you also have the flexible access to some percentage of your money. You are given the opportunity to choose between fixed and variable annuities.
- Fixed Annuities: Fixed Annuities are backed by highly rated insurance companies which guarantee the principal amount deposited (Guarantees are based on the claims-paying ability of the issuing insurance company. Subject to the claims paying ability of the issuing insurance company). Because you earn compound interest on the money that would have gone to pay taxes, savings grow faster than they would in a taxable investment at the same rate.
- Variable Annuities: A variable annuity is a long-term retirement investment vehicle. It is an insurance contract that is specifically designed to build your retirement savings. A variable annuity can provide you with retirement income in several ways including options that can help you receive an income stream that you cannot outlive. Most variable annuities offer a broad range of investment objectives. You can choose from relatively conservative portfolios with a lower level of risk to more aggressive investment portfolios with a higher degree of risk coupled with the potential for higher investment returns. Highly qualified, world-class portfolio managers professionally manage these investment portfolios. The annuity’s value will vary over time according to the performance of the individual investment portfolio you choose. Variable annuities can be a valuable asset to your investment portfolio because they allow you to:
- Defer paying taxes until you begin taking distributions
- Take advantage of market opportunities
- Receive monthly or yearly income that you cannot outlive
- Ensure that your beneficiaries receive the full value of their inheritance on a timely basis
Variable Annuities are sold by prospectus. Investors should carefully consider the funds’ investment objectives, risks, charges and expenses before investing. The prospectus contains this and other information about the investment company. A prospectus is available from an Investment Executive. Please read the prospectus carefully before investing.
Mutual funds are pools of assets of many shareholders that fund managers use to buy securities. Whether you’re a small or large investor or prefer conservative or aggressive investments, mutual funds will give you an opportunity for capital appreciation or competitive yields, liquidity and relative safety. That is because mutual funds provide diversification-with the added benefit of professional management.
Whatever your investment objectives and desired level of risk, there are mutual funds to match. From conservative to aggressive; from immediate income to long-term growth; you choose the fund or funds that best meet your investment needs including:
- Money market Funds
- Fixed Income or Bond Funds
- Equity or Growth Funds
- Balanced Funds
- Specialized Mutual Funds
If you are looking for a versatile investment that offers opportunities for your needs, consider mutual funds; the choice of many investors.
Mutual Funds are sold by prospectus. Investors should carefully consider the funds’ investment objectives, risks, charges, and expenses before investing. The prospectus contains this and other information about the investment company. A prospectus is available from an investment Executive. Please read the prospectus carefully before investing.
A brokerage account provides the opportunity to purchase, sell and hold a variety of securities including stocks, bonds, government securities, mutual funds, unit investment trusts, etc. The securities can be held in the account for safekeeping and reporting. Cash in the account can be swept into a money market account on a daily basis. The decision about what assets classes and what securities to purchase are up to the individual with advice from the Investment Executive.
Some of the benefits of a brokerage account are:
- Safekeeping of securities
- Record keeping
- Immediate access to assets
- Monthly or quarterly statements
- Simplified 1099 reporting at year end
Stock represents ownership of a specific company measured by shares. The shares may be entitled to receive a portion of the earnings of the company in the form of dividends that are paid quarterly or annually. Common stock can be bought and sold on a variety of exchanges on a daily basis.
Bonds are loans or obligations made between an individual and a corporation. The bonds have a maturity date and a fixed rate of interest which is usually paid quarterly. Some bonds may be convertible to stock under certain circumstances. Bonds may be bought at original issue, and they may be bought and sold in the secondary bond market. Due to fluctuating conditions, the value may be lower than face (par) if sold prior to maturity.
Managed investing is an approach to achieving financial success through asset allocation. **For every investor, there is an appropriate mix of investments based on risk tolerance. To determine appropriate asset allocation for your portfolio, your Investment Executive considers several personal factors:
- Time horizon for investment
- Ability to withstand declines
- Attitude toward volatility
- Preference for types of assets
- Attitude toward risk and reward
- Amount of investment
Life insurance is a contract with an insurance company that provides a sum of money (death benefit) upon the death of the insured in return for an annual premium payment. The death benefit can be paid to the beneficiary as a lump sum or as an income for life. Life insurance can provide financial support for loved ones upon unexpected death of the insured. It can also be used as an estate planning tool or to provide immediate funds to protect a business or other purpose upon death. ***
Many types of life insurance are available including Term Life, Whole Life, Universal Life and Variable Life. Each type has a specific purpose and an individual may need more than one type to adequately provide the coverage they need.
An insurance policy check-up should be done every few years to make sure that the amount of your insurance coverage is adequate with changes that have taken place, that the beneficiaries are still correct and that there is the right amount of whole life insurance versus term insurance.
Long Term Care insurance provides coverage for nursing home care, and often in-home care, in the event that a person is unable to carry out the basic life skills required for independent living. Your risk of needing long term care is probably much greater than you realize. You may need long term care services if you have an illness or injury and you're not able to perform one or more activities of daily living at home, you have accident causing a nursing home stay or you are stricken with Alzheimer's disease or senility. Assistance may be needed on a temporary or permanent basis for performing such daily activities as bathing, dressing or cooking.
This type of insurance is flexible in the dollar amount of coverage, the length of time the coverage will last and the amount of inflation protection to cover rising medical costs. Care might be provided in an assisted living facility, an adult day care center, hospice, a nursing home, an extended care facility, or in your own home.
Individual Retirement Plan (IRA)
An Individual Retirement Plan, or IRA, is a retirement account that provides some tax advantages to the individual who wants to save money for retirement. These plans allow a person to set aside money over their working years and invest the money to supplement their income when they retire. There are several types of IRA with different features. The two main type of IRAs are:
In a traditional IRA, contributions are often tax-deductible in the current year depending on income and availability of other plans. Investment earnings are not taxed as long as they stay invested in the plan. Withdrawals before age 59½ are generally penalized and all withdrawals are taxable as income. Withdrawals must start at age 70½. An IRA can use a variety of investment types such as mutual funds, annuities, individual stock or brokered certificates of deposit.
In a Roth IRA, contributions are not tax-deductible in the year they are made but generally withdrawals after age 59½ are not taxed as income. Earnings accumulate tax free. A wide variety of investment can be used in a Roth IRA.
Your Investment Executive can help you with your investment decisions so that your IRA will help you achieve your financial goals.
The cost of college continues to climb and for most families with children, saving must be accomplished over a number of years. The 529 Plan is a college savings plan that allows individuals to save and invest on a tax advantaged basis in order to provide funding for college expenses for a child or other beneficiary.
The 529 Plan offers several advantages:
- Funds grow tax deferred.
- Withdrawals for education expense are not subject to income tax or penalty.
- Funds are controlled by the donor.
- The 529 Plan can be started with a lump sum contribution or small systematic payments.
- The investments can be made in a variety of mutual funds of all types or in a managed fund.
* Withdrawals prior to 59 ½ may be subject to a 10% IRS penalty and the amount withdrawn is subject to ordinary income tax. Surrender charges are deducted for redemptions during the early years of the annuity contact.
** Asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss.
*** Consult your legal counsel for advice and information concerning your particular circumstances. Neither PrimeVest, nor any of its representatives may give legal advice.
Financial planning is the most important step you can take toward achieving financial freedom. Our financial planning professionals will create a plan that can help protect and enhance your long term financial goals. Upon your request, our financial planning professionals will work with you, your attorney and other advisors to help assess your individual situation.
Contact the Advisor in your area to help you set up your individual plan.
The Financial Planning Process
Chemical Financial Advisors has contracted with PrimeVest to offer financial planning using their “MONEY GUIDE PRO”, a comprehensive software solution. There are six steps to the financial planning process:
- Establish Core Values and Financial Goals – We will help you identify and prioritize your financial goals through conversations about your concerns, hopes and goals for the future.
- Gather Financial Information – We will work with you to gather all pertinent information needed to compile a comprehensive financial plan.
- Analyze Information and Create Financial Plan – Using the information gathered, we will identify the strengths and weaknesses in your present financial condition and show you how they may affect your goals for the future.
- Present Financial Plan & Advise on Investment and Tax Strategies – We will design a set of recommended strategies tailored to your circumstances and goals, including alternative ways of achieving those goals.
- Implement Financial Planning Strategies – We will help you to acquire all of the necessary financial products and services to put your financial plan into action.
- Review Progress – On an ongoing basis, we will help evaluate the performance of your portfolio and review change in your circumstances that may necessitate an update to your financial plan and goals.
Advisory services may only be offered by Investment Adviser Representatives in connection with an appropriate PrimeVest Advisory Services Agreement and disclosure brochure as provided.
Investments are: • Not FDIC insured • May lose value • Not financial institution guaranteed • Not a deposit • Not insured by any federal government agency.
Cetera Investment Services and Cetera Investment Advisers are under separate ownership from Chemical Bank and its related companies. Advisory services may only be offered by Investment Adviser Representatives.