INVESTMENT ANNUITIES
If you want to save more for retirement and have guaranteed income, an annuity may be the right investment vehicle for you*.
*based on the claims paying ability of the insurance company
The goal of retirees — past, present, and future — is to always have a source of income. In the past, retirees could rely on Social Security and employer-sponsored pensions as a source of retirement income. Over the years, much has changed. Today, life expectancies have increased, while the certainty of Social Security and employer-sponsored pension plans has diminished. By all estimates, the next generation of retirees will live longer and spend more time being retired than any previous generation.
Is Your Retirement on Track?
When it comes to your own retirement strategy, you may be wondering if you’re on track to have enough assets and provide enough income at the retirement stage of your life. Are you prepared for a retirement that may last 10, 20, 30 years or longer? Will your retirement income last as long as you? Will you have enough money when you are ready to retire? Are Annuities a good option? Annuities are established for the purpose of providing a regular stream of income, typically upon retirement. They can be shaped and sized according to your needs and give you the option to begin receiving the income at a future date or immediately. You can fund your annuity gradually or all at once. Depending on the type of annuity, its value can be tied to a fixed interest rate or the performance of underlying investment funds. Penalty free withdrawals can begin at age 59½ similar to an IRA.
It is Possible. You can arrange:
- For the annuity to provide an income for a specific period of time or an entire lifetime.
- For the income you receive from a fixed income plan or variable income plan that is tied to the performance of underlying investment funds.
- To have the annuity provide income to you alone, to you and a significant other, to continue to whichever of you lives the longest, and even to another beneficiary beyond the lifetime of you and any significant other.
Types of Investment Annuities
Variable Annuities
Medium to High Risk
Equity Indexed Annuities
Low to Medium Risk (Defined Parameters)
Fixed Annuities
Low Risk (Defined Return)
Deferred Annuity:
A deferred annuity is a long-term investment designed to help you grow your assets and provide a steady income stream for your retirement. Basically, that means you invest your money now and hold off on using it until you’re ready to retire. You get to invest on a tax-deferred basis, so you don’t pay taxes on any accumulated earnings until you withdraw your money. And then, only your earnings are taxed as ordinary income.
Immediate Annuity:
An immediate annuity provides consistent and stable income. You know that a check for a specific amount will be received on a regular basis and that the income will continue for as long as you have requested. An immediate annuity is sometimes referred to as an income annuity.
Tax-Free “1035” Exchanges
Section 1035 of the U.S. tax code allows you to exchange an existing variable annuity contract for a new annuity contract without paying any tax on the income and investment gains in your current variable annuity account. These tax-free exchanges, known as 1035 exchanges, can be useful if another annuity has features that you prefer, such as a larger death benefit, different annuity payout options, or a wider selection of investment choices.
You may, however, be required to pay surrender charges on the old annuity if you are still in the surrender charge period. In addition, a new surrender charge period generally begins when you exchange into the new annuity.