A person who is required to act in your best interest with prudence, diligence, skill, and loyalty. In financial situations, this means a fiduciary is required to make financial decisions that are in your best interest, rather than their own.
Financial Advisors focus on investment products, including stocks, bonds, and mutual funds. They also manage portfolios, deliver financial plans, recommend investments, are securities licensed, and help monitor financial performance versus goals over the long term.
Financial planners deliver financial plans, which you can initiate on your own or through a financial advisor. This service also includes ongoing reviews and guidance. Financial planners are like architects who design a house—they can create the plan, but you need to hire the contractors to build it.
A number of professions in the financial services industry, including insurance agents, accountants, investment managers, financial planners, and financial advisors.
An insurance policy issued by an insurance company that guarantees a minimum interest and insures you will be paid a steady income for a certain time period or for as long as you live, depending on the option you select. Fixed annuities guarantee that you will not lose any of the money in your annuity when investment markets lose money.
Fixed Deferred Annuity
A fixed annuity where you can delay your payments until a future date and you do not pay income taxes on the interest you earn until you decide to take payments from your annuity.
Fixed Indexed Annuity
A fixed indexed annuity is a type of deferred annuity that earns interest based on changes in a market index. For example, a stock market index is a measurement of a section of the stock market and it is calculated from the price of the selected stocks.
Fixed Rate Annuity
A type of deferred annuity that earns a rate of interest that is determined by the insurance company. The rate is fixed and won’t change during a stated period of time, typically one, three, or five years.
Free Look Period
An annuity contract or life insurance policy provision that allows the contract owner to return the policy for a full refund if they do not want the policy. This period varies by state and is typically between 10 and 30 days.
Early withdrawal of a portion of your money without having to pay a fee to the insurance company you bought the annuity from. The maximum withdrawal is usually up to 10 percent of the value, but may vary by insurance carrier. A 10 percent federal tax penalty may apply to annuity withdrawals before age 59 ½, in addition to ordinary income taxes.
Full Retirement Age
The age at which a person may become entitled to full or unreduced retirement benefits.