Annuities - Chartered Financial Services in Warren NJ Annuities can be a smart way to diversify or add to your overall retirement or financial plan if you’re concerned about outliving your income. They help you generate additional monthly income streams after an initial investment. With a wide variety of annuities available, it’s important to understand the product, the risks involved and how an annuity benefits you in the long run. What are annuities? Simply put, an annuity is a contract between you and an insurance company. In effect, the insurance company is promising to pay you a specific amount of money either immediately or over a specified period. Annual payments may be one-time or divided equally over a number of months. How do annuities work? Annuities are designed to be a long-term investment option to provide income over a specified period. They start with you (sometimes called the “annuitant” in contracts) depositing money with an insurance company and the insurer guaranteeing a specific return on those funds. There are different types of annuities available including: Variable annuity – offer professionally managed investment portfolios that clients can select. Variable annuities are considered an investment and as such are regulated by the Securities and Exchange Commission. As with any other investment, there is no guarantee it will substantially grow. With a variable annuity your return is based on the performance of the investments. Fixed annuity – the insurer guarantees a specific payment for a predetermined period. Fixed annuities are regulated by state insurance commissioners since they are considered an insurance policy, not a financial security. Account values are determined by your purchase payments that grow a fixed rate of return. Indexed annuity – this type of fixed annuity offers a combination of indices from which a client can choose, which may provide a greater return than the guaranteed minimum rate of return. Typically, some of your account value growth is calculated based on a stock market index (like the S&P 500) and guarantees a minimum rate of return. Although these annuities calculate interest earned on the account value by tying to a stock market index, they are not securities and typically governed by state insurance commissioners. Should I invest in an annuity? Annuities can be a good investment as part of an overall, well-advised strategy. However, before you purchase an annuity, you should evaluate the strength of the company you are investing with, understand the fee structure and be fully aware of the associated risks. Investments in annuities make sense for those who want to ensure they have funds available for long-term care, for their retirement or want to leave their loved ones a lasting legacy. Read more information in the variable annuity prospectus below View Variable Annuity Prospectus Life insurance and annuities contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with complete details. Call Chartered Financial Services in Warren New Jersey today at 800-549-6007 to learn more about annuities or contact us if you have any additional questions.