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Congratulations! Your client was drafted by an NBA team. Your client will be making money, you’ll be making money…now what do you do? How about taking steps to ensure your client has money he and his family can never outlive, for as long as they live. An annuity will help toward that goal.
Today’s modern annuities build on many of the features of traditional annuities: they grow tax-deferred and offer guaranteed income for life. Further, they allow individuals to customize their retirement income to meet specific retirement needs. Customization can be achieved through the optional living benefits available. Some of the new and more significant features of optional living benefits include:
A) A measure of control and ownership of assets while receiving guaranteed lifetime income.
B) The ability to capture market upswings in your “Protected Withdrawal Value”—used to determine income payments—while helping to protect income from market downturns.
C) A wide selection of investment portfolios to meet your risk tolerance, whatever it may be.
The guaranteed income under the optional living benefit is protected regardless of how portfolios are invested. In effect, with a guaranteed lifetime income option, one never needs to worry about outliving his/her income stream regardless of how the market performs. Like traditional annuities, you have income for life; unlike traditional annuities, you have a measure of control over and access to the underlying assets. For example, you can withdraw an amount in excess of the guaranteed income payments, but this will reduce your future guaranteed income payments proportionately. This control allows you to potentially grow your assets, access your money when needed, and possibly leave money behind for your heirs.
Disclosures. The information contained herein is neither an offer to sell nor a solicitation of an offer to buy any security. Past performance is not a guarantee of future results. Further, the information herein is intended solely to provide general information and does not constitute a promotion of any offerings or products. Donald J. Kushner is an independent financial advisor with Arque Capital, Ltd., and does business as DK Sports Financial. Arque Capital, Ltd., and DK Sports Financial are unrelated entities. Securities offered through Arque Capital, Ltd. 7501 E. McCormick Parkway, Suite 111 North Court, Scottsdale, AZ 85258. (602) 971-9000. Member FINRA/SIPC. Any unauthorized reproduction of this information is strictly prohibited.
One reply on “NBA Draftees Should Look Into Annuities”
I think it is important to note that although annuities can be a viable part of one’s portfolio, it definitely should not be the only part in one’s portfolio, especially when the client in question is a 20-something who’s realistic maximum earning years will be done by the time he/she is in their mid-30’s. Annuities are great for long term financial goals, but are not very economical if the money is needed prior to age 59 1/2. I help my clients (especially athletes) create multiple buckets of money that are intended for different purposes and time horizons (short, medium and long-term).