Annuities

Guaranteed Retirement Income

Would you feel more confident about retiring if you knew that all of your living expenses were covered with a guaranteed lifetime income? Would you enjoy retirement more if your income was guaranteed or tax free? The insurance industry can provide this for you through products that are designed for risk management of your money. This is what insurance is.  

Peace of mind is priceless........

Annuity Questions and Answers

How are annuities funded?

Single premium - A one time deposit or during the first year only.

Flexible Premium - On going premiums payments flixible to the annuity owner in amount and frequency.

What is annuitization?

The point in time in which an annuity switches from the accumulation phase to a guaranteed income

What are annuity classifications?

Immediate - Usually paid with a lump some in exchange for guaranteed income for a certain number of years, or lifetime. Payments begin within 12 months of policy issue.

Deferred - Used for accumulation purposes. Can be funded with a lump sum, ongoing premiums, or a combination of both. Annuitization will begin at a later date.

What about surrender charges?

All deferred annuities have surrender charges that will vary depending on the product.  Annuities are not short term investments, so the company will make long term investments and many will give you a bonus when you purchase the annuity. The bigger the bonus, the longer the surrender charge.  Think of this system as pre-determined additional interest, if you stay with the product.

How often do interest rates change?

Most annuities will have a guaranteed minimum interest rate, and with many, you can choose a 1,5,7, or even 10 year locked in rate.

What is annuity taxation?

There will be taxation on the growth portion of an annuity. Note that if the annuity is inside a qualified plan, rules of the play will apply.

Can annuity income be tax free?

Only if the annuity is purchased within a tax free vehicle such as a Roth IRA. Although a Roth already has tax free growth, the security of an Indexed Annuity or a Fixed Annuity with a good bonus, could be a good combination.