Annuity Options 

What is an annuity?

An annuity is a long-term investment between you, the annuitant, and an insurance company, the annuity issuer. Under this contract, you pay after-tax funds to the annuity issuer, who then invests your principal to meet your financial objectives and pays you or your beneficiary back with earnings (subject to the claims-paying ability of the issuer).

If you have  a fixed annuity, your interest rate is guaranteed. With a variable annuity, your earnings are linked with the fluctuating performance of your investments and may be worth more or less than your principal when redeemed. In addition, you have added control in how your money is invested, creating a higher potential for growth. However, this option comes with a higher risk in return.

Unlike other investment plans, there is no limit to how much you can invest in an annuity. Your funds will steadily grow with a tax-deferred status, and you pay your regular tax income rate on only your earnings upon withdrawal.  

What annuity options are available?

An immediate annuity can begin paying you right away. You can choose whether you want your income guaranteed for a specific time period or if you want lifelong payments. The amount of your payments is calculated based on your principal and your life expectancy.

A deferred annuity is broken up into two phases:

• Accumulation: This is when you add money to your annuity, whether you pay in a lump sum or you make a series of payments. You can continue to let your account grow tax-deferred for an indefinite amount of time.
• Distribution: This is when you begin withdrawing money from your annuity whether you take out systematic withdrawals or you annuitize to supplement your finances with a regular stream of income for life.

Why buy an annuity?

An annuity is a good investment option for individuals who are willing to take a bigger risk in hopes of earning a bigger payout. Your earnings can then be used for supplemental income during retirement, guaranteed financial independence as you age, or a monetary legacy to leave behind for your loved ones. An annuity can help you continue living comfortably well into old age.

Contact us to learn more about planning your future with an annuity. We are happy to answer your questions and help begin your investment process today.

What is a fixed annuity?

A fixed annuity is a contract between you, the annuitant, and an insurance company, the annuity issuer. This is a long-term investment in which you pay after-tax funds to the annuity issuer, who then invests your principal and pays you or your beneficiary back with earnings. With a fixed annuity, you earn a guaranteed interest rate (subject to the claims-paying ability of the issuer) on your investment.

Unlike other investment plans, there is no limit to how much you can invest in an annuity. Your funds will steadily grow with a tax-deferred status, and you pay your regular tax income rate on only your earnings upon withdrawal. A 10 percent tax penalty may be charged if you withdraw from your annuity before the age of 59½.

The two phases of a fixed annuity include the following:

• Accumulation: This is when you add money to your annuity, whether you pay in a lump sum or you make a series of payments. You can continue to let your account grow tax-deferred for an indefinite amount of time.
• Distribution: This is when you begin withdrawing money for your annuity at age 59½, whether you take out lump sums or you annuitize to supplement your retirement finances with a regular stream of income for life. Early withdrawals may be subject to a penalty fee.    

Why buy a fixed annuity?

Fixed annuities are popular choices for individuals who want a supplemental income that they cannot outlive. Your principal investment and predetermined interest rate are both guaranteed. This limits the risk exposure on your hard-earned money.

Consider these benefits of fixed annuities:

• The lifelong income stream a fixed annuity supplies will supplement the income you receive from Social Security, pension plans and other employer-sponsored retirement plans that have contribution limits.
• The annuity funds can be used to maintain your financial independence in the event of your need for long-term health care.
• Besides caring for your own needs, this investment can go toward providing a monetary legacy for your children.
• If funds are to be given to a beneficiary, money from a fixed annuity will be paid directly and will not be subjected to the probate process.

Contact us to learn more about protecting your future with a fixed annuity. We are happy to answer your questions and help start your investment process today.