FAQ (Frequently Asked Questions)


  • What is an annuity?

    An annuity is a financial product that provides a guaranteed stream of income for a set period of time or for life. It is typically sold by insurance companies and can be purchased with a lump sum payment or through a series of payments. There are different types of annuities, including fixed annuities, variable annuities, and indexed annuities. Fixed annuities offer a set interest rate that is guaranteed for a specific period, while variable annuities allow the investor to choose among different investment options that can affect the rate of return. Indexed annuities offer returns that are linked to a market index, such as the S&P 500, with a guaranteed minimum rate of return. An annuity can be a useful tool for retirement planning, as it can provide a reliable source of income during retirement. However, it is important to understand the fees, restrictions, and potential risks associated with annuities before making any investment decisions.

    02 Jan 2009
  • How early can I retire?

    The answer to this question depends on several factors, such as your desired lifestyle in retirement, your current financial situation, and any savings or retirement accounts you may have. In general, it is recommended to have at least 25 times your annual expenses saved by the time you retire. This should allow you to withdraw about 4% of your savings per year in retirement without running out of money. If you have a comfortable amount of retirement savings, you may be able to retire as early as your 50s or 60s. However, if you have not saved enough, you may need to work longer or consider taking other steps to increase your retirement savings. It is recommended to speak with a financial advisor to understand your retirement options and what you can do to retire early if that is your goal.

  • What is a 403b?

    A 403(b) plan is a type of retirement savings plan that is available to employees of certain non-profit organizations, such as public schools, colleges, universities, hospitals, and some religious organizations. It is similar to a 401(k) plan but is specifically designed for employees of tax-exempt organizations. Employees can contribute a portion of their salary to the 403(b) plan, which is then invested in a selection of investment options offered by the plan. Contributions to a 403(b) plan are made on a pre-tax basis, which means that taxes are not paid on the money until it is withdrawn from the plan. In addition, some 403(b) plans offer an employer match, which can help to maximize contributions and retirement savings.

    26 Nov 1973
  • What is an IRA?

    An IRA account, or Individual Retirement Account, is a type of retirement account that allows an individual to save for retirement with tax advantages. There are two main types of IRAs: traditional and Roth. In a traditional IRA, you can typically deduct contributions on your tax return in the year they are made, then pay taxes on the money when you withdraw it in retirement. In a Roth IRA, you contribute with after-tax dollars, but you can withdraw the money tax-free in retirement. Both types of IRA accounts have limits on how much you can contribute each year, and there are rules about when you can withdraw the money without penalties.

    10 Apr 2023
  • How can I create my own pension?

    Harbor Shield Financial is a financial planning and investment management firm that can help you create a pension-like income stream through various strategies and investment vehicles. The team at Harbor Shield Financial can analyze your unique financial situation and retirement goals, and recommend a customized solution to meet your needs. They can help you choose an appropriate annuity or other pension-like product that will provide guaranteed monthly income payments for life, while ensuring that your investment portfolio is well-diversified and designed for sustainable long-term growth. They can also provide ongoing management and monitoring of your investments to ensure that you stay on track to meet your retirement income goals. Overall, Harbor Shield Financial can help you create a comprehensive retirement plan that accounts for all of your income sources, including Social Security, pensions and annuities.

    10 Apr 2023
  • I'm self employed, how can I get a pension?

    As a self-employed individual, you have several options to establish a pension plan for yourself. Here are some of the most popular retirement plans for the self-employed that also include annuities: 1. Individual Retirement Account (IRA) – You can open a traditional IRA, which allows you to deduct contributions from your taxable income or a Roth IRA which allows for tax-free withdrawals. You can also choose to invest in an annuity as part of your IRA to provide a guaranteed stream of income in retirement. 2. SEP IRA – Simplified Employee Pension (SEP) IRA allows you to contribute up to 25% of your net self-employment income (up to $56,000 in 2019) into an individual retirement account. A SEP IRA also allows you to invest in an annuity as part of your retirement plan. 3. Solo 401(k) – This type of plan is available for self-employed individuals, and it allows you to contribute up to $56,000, or $62,000 if you are age 50 or older in 2019. You can also select an annuity option as part of your retirement plan. 4. Defined Benefit Plan – This type of plan is usually suited for high earners with consistent income but could also benefit self-employed individuals looking to start a pension plan. It guarantees you a certain amount of retirement income based on your earnings and services. All the above plans offer an annuity as a type of pension or income stream, which provides a fixed source of income throughout the duration of the annuity policy or even for a lifetime.

    10 Apr 2023
  • What is an IUL?

    Indexed Universal Life (IUL) is a type of permanent life insurance that provides both a death benefit and cash value accumulation. It is similar to a standard universal life insurance policy, but with the added feature of being linked to a market index, such as the S&P 500. IUL policies can be used as a wealth-building tool because the cash value that accumulates within the policy can be accessed tax-free through policy loans or withdrawals. Additionally, the death benefit can be passed on to beneficiaries tax-free, making it a useful tool for estate planning. One of the benefits of an IUL policy is that it offers the potential for higher returns than traditional fixed life insurance policies.

    10 Apr 2023
  • How much money will I need to retire?

    How much money you will need to retire depends on a number of factors, including your current lifestyle expenses, expected future expenses and goals, where you live, and how long you expect to live. Here are a few steps you can follow to help estimate how much money you’ll need to retire: 1. Calculate your expenses: Start by determining your current monthly expenses and calculating how much they will increase or decrease over time. 2. Identify your sources of retirement income: Consider all of your sources of retirement income, including Social Security, pension benefits, and retirement savings accounts like 401(k)s or IRAs. 3. Determine your retirement age: Determine at what age you would like to retire, as this can impact how much money you will need to save. 4. Estimate your life expectancy: Review your family history and health status to estimate how long you can expect to live. 5. Use a retirement calculator: Use an online retirement calculator to help estimate how much you will need to save based on your age, income, and other factors. Keep in mind that these calculations are estimates and that your retirement needs and expenses may change over time. It’s important to regularly review your retirement plan and adjust your savings and investments as needed to meet your changing needs and goals.

    10 Apr 2023
  • I am a teacher, how can I understand my pension?

    Harbor Shield Financial is a financial planning and investment management firm that can help teachers understand their pension plans and plan for retirement. The team at HSF can help you: 1. Understand the benefits and features of your pension plan, including any vesting requirements, contribution limits, and retirement benefit calculations. 2. Explore strategies to optimize your pension benefits based on your personal objectives and financial situation. 3. Evaluate your overall retirement readiness, taking into consideration your pension plan, other sources of retirement income, and expenses. 4. Develop a comprehensive retirement plan that aligns with your retirement goals and objectives. 5. Monitor your pension plan and adjust your retirement plan as necessary as you approach retirement.

    10 Apr 2023
  • I'm a state worker, how can I understand my pension?

    Harbor Shield Financial provides financial planning and investment management services that can help state workers understand their pension plan and plan for a financially secure retirement. The team at HSF can help you: 1. Understand the specifics of your state's pension plan, including eligibility requirements, vesting schedules, and payout options. 2. Calculate your projected retirement income based on your years of service, salary, and retirement age. 3. Develop a personalized retirement savings plan that can supplement your pension income and help you achieve your financial goals. 4. Provide ongoing investment management services to help ensure that your retirement assets continue to grow and are properly allocated to meet your long-term income needs. Whether you're just starting your career or are already approaching retirement, Harbor Shield Financial can provide the guidance and expertise you need to make informed decisions about your retirement planning.

    10 Apr 2023
  • Did Babe Ruth really have an annuity that kept his money safe through the Great Depression?
  • Will I loose money with an annuity?