Annuities are the prized jewels among retirement products that can be used to help you increase and protect your savings to generate a stream of income for your later remaining years. Thinking about Retirement? Think about this.

  • Deferred annuities are a way to save tax-deferred dollars for your retirement after you have contributed the maximum amounts to your IRA, 401(k), or other tax-deferred savings plans.
  • Deferred variable annuities have withdrawal benefits that provide guaranteed lifetime income and growth potential with easy access to your assets.
  • Income annuities can turn a portion of your savings into a stream of income for either the rest of your life or a set period of time.

There are three basic types of annuities:

Fixed Annuities are regulated by state insurance commissioners. The insurance company promises you a minimum rate of interest and a fixed amount of periodic payments.

Variable Annuities will vary your payout depending on how much you put in, the rate of return on your investments, and your expenses. The insurance company allows you to direct your annuity payments to different investment options, usually mutual funds.

Indexed Annuities combine features of securities and insurance products. The insurance company credits you with a return based on a stock market index, such as the Standard & Poor’s 500 Index.

Any questions?

What happens to my annuity if I die?
It depends on your particular contract. If you die with a guaranteed savings annuity, your beneficiaries are guaranteed to receive the full balance of your annuity. This includes everything you put in plus the interest you’ve earned. If you have an income annuity you can guarantee that income continues for your entire life. Should you die prematurely, it will be passed on to your beneficiary until all of your money has been paid back.
Will withdrawals from my guaranteed savings annuity be taxed?
For qualified annuities held within a Traditional or Roth IRA, standard IRS IRA rules will apply. For non-qualified annuities, you will pay taxes on the portion of the withdrawal that is considered earnings. Withdrawals before age 59½ may also trigger a 10% federal tax penalty.

Can I transfer an annuity from another company without having to pay taxes?
Yes, so long as the annuity is still in the accumulation phase. The IRS allows a few different ways for you to transfer your money from one annuity to another without paying taxes. Remember, that although the IRS allows tax free transfers, your current company may charge surrender fees. We can help you look over your contract before transferring from one annuity to another.

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