Editor's Note: The following article is excerpted from Aviss's book, "Strategies for Protecting Wealth," published by McGraw-Hill.
Many conservative financial planners believe that the Swiss annuity is the single most effective way to diversify some of your capital out of the U.S. dollar and into Swiss francs. Americans investing in a Swiss annuity are acquiring protection by purchasing what may be the safest and most straightforward overseas investment available today.
Most international investors establish their Swiss annuities with a single premium deposit. On the other hand, other investors choose to dollar-cost-average these investments by making periodic deposits, and many make arrangements for these payments through a Swiss bank account.
However, you don't have to have a Swiss bank account to make your premium deposits. In fact, such an account would be reportable under U.S. law, thus removing one of the advantages of Swiss annuities. Instead, there is another way to make your premium deposits-through a premium deposit account.
This method has so many advantages it is surprising that so few people know about it. In effect, a premium deposit account is an interest-bearing "bank" account opened at your insurance company. It has two distinct advantages over a regular Swiss bank account.
First, it is not reportable to the tax authorities because you are making payments to an insurance company, not a bank. Second, it pays interest rates about 1% higher than bank deposit (savings) accounts. Moreover, there is no withholding tax on the interest; all payments are tax-free. Remember, when you send your money to Switzerland, it is immediately governed under some of the most consumer-oriented laws of asset protection and privacy in the world.
Versatile Options
Most
people buy annuities so that they will have a constant source of income
during retirement. The Swiss realize that the needs of people differ
and so they have developed a variety of options for both single and
joint annuities.
When you consider the various options Swiss annuities offer, there are several factors you should examine. First, you should consider your age and the age of your spouse when the income from your annuity is likely to begin. You must also consider the amount of the investment you are willing to make. Such factors will play a crucial role in the type of annuity you select.
Of all the factors you should examine, it is age that probably will have the greatest impact. The older an investor is, for example, the more income difference there will be between an annuity without refund and one with any of the beneficiary options. For example, should you purchase an annuity when you are 55, the difference in life income created under each option is not that much, because the life expectancy for both men and women at 55 exceeds 25 years. Based on life expectancy and payment rates, the insurance company will likely have to pay out the entire amount of the plan no matter what option the contract contains. Options will have different effects, based on age.
There are many
options from which you may choose. Assessing your financial goals and
situation is important. Asking yourself questions similar to the ones
that follow can prove helpful:
1. Who is dependent upon my financial support?
2 What is the purpose of my buying an annuity?
3. How much money can I open the account with?
4. How much money can I invest monthly? Yearly?
5. When (based on current considerations and factors) do I plan to take funds out?
6. How (based on current considerations and factors) do I plan to take funds out?