September 2, 2008
I've worked exclusively with the Senior market in Florida for over 20 years. The reason Seniors are so attracted to FIA's is the safety factor first, and tax deferral second. Seniors living on fixed incomes are taxed to death. They are taxed on their savings, retirement plans, social security, their homes, taxes on tax, and other risky unsuitable investments. Seniors learn after purchasing an indexed fixed annuity, they suddenly have more income to get by on. The more money they divert from taxable CD's, money market accounts and other taxable investments, into tax deferred FIA's, not only do they pay less taxes, reduce their risk factor, broker fees, expensive trustee fees in "managed accounts", but experience more piece of mind, and rapid growth with their FIA, and less paper work at tax time. They don't have to fear "churrning" by their broker, or being taken advantage of in later years, should they become incompetent or unable to make important financial decisions.
Never once, in twenty years, have I ever seen any brokerage account, trustee account, or managed account, include a fixed annuity, index fixed annuity, or even a CD in a single portfolio
Split-funded index annuity plans are ideal for seniors seeking income and piece of mind, knowing exactly how much income to count on each month for the rest of their lives. They are able to maintain liquidity in emergencies, save tax dollars, avoid sales fees or charges, while protecting their nest egg, and not having to make financial decisions ever again