Whether you need to supplement retirement income derived from other sources or fund your retirement income completely, tax-deferred annuities may help you meet your long-term goals and objectives.
TYPES OF ANNUITIES

► Variable Annuities
► Fixed Annuities
► Single Premium Annuities
► Immediate Annuities

Most annuities are sold by prospectuses, containing complete product details, including fees, charges and risk considerations. Product, Portfolio and Rider offerings may vary by state. Investors should read the prospectus carefully before investing.

With an annuity – a contract between you and an insurance company – you agree to make at least one payment to the insurance company and the insurance company agrees to make a series of payments to you at a later date. Your payment(s) to the insurance company becomes your annuity principal. This principal, plus any earnings (minus any withdrawals) is then paid to you at a time you designate, usually at retirement. Payments can be made for a specific length of time or for life.

  • The individual who purchases the annuity is called the owner, or contract holder.
  • The individual whose life expectancy is measured to establish the basis of the annuity payment is called the annuitant (often, one and the same as the owner/contract holder).
  • The individual designated by the owner/contract holder to receive the contract’s benefits in the event of the annuitant’s death is the beneficiary.

 

Variable Annuities:

Whether you need to supplement retirement income derived from other sources or fund your retirement income completely, tax-deferred annuities may help you meet your long-term goals and objectives.

Most annuities are sold by prospectuses, containing complete product details, including fees, charges and risk considerations. Product, Portfolio and Rider offerings may vary by state. Investors should read the prospectus carefully before investing.

Fixed Annuities:

Fixed annuities can be a great choice for a variety of investors, especially:

  • The conservative investor who does not wish to participate in the fluctuating equity market.
  • The pre-retirement investor looking to utilize tax-deferral to maximize competitive fixed rates, over time, when compared to other fixed rate products.
  • Any investor looking for a guaranteed income rate.

Fixed annuities pay a guaranteed fixed percentage rate of return, are guaranteed by an insurance company, for a specified period of time (usually between one and 10 years). As with all annuities, fixed annuities offer investors the benefits of tax deferral.

Single Premium Annuities

Single premium annuities require a single up-front lump sum payment to cover the entire cost of the annuity.

  • Flexible premium annuities allow a series of deposits over a period of time.

Some fixed annuities are designed to have a market value adjustment (MVA) feature. MVA is an adjustment made to the value of a withdrawal or surrender based upon changes in interest rates. The MVA may have a positive effect (increasing the value of the withdrawal), a negative effect (decreasing the value of the withdrawal) or no effect at all.

Immediate Annuities

The immediate annuity is an excellent option for investors seeking the security and convenience of periodic income payments. Most often immediate annuities are purchased by retired individuals who no longer work or those who require additional income to supplement part-time employment.

Immediate annuities were developed to provide guaranteed and convenient periodic income payments. Immediate annuities are funded with a single payment because income payments begin shortly after the contract is purchased. This lump-sum payment guarantees periodic income payments over a pre-determined period of time.

Fixed annuity owners may choose one of the following payout options:

  • Period Certain: guaranteed income over a period ranging from five to 30 years.
  • Life Only: guaranteed income for the life of the annuitant.
  • Life with a Period Certain: guaranteed income for the life of the annuitant and for a period ranging from five to 30 years.
  • Joint and Survivor: guaranteed income covering two or more lives (usually the investor and spouse) and continuing in-force as long as any one of the annuitants survive.

Please review the annuity contract for explanations of the taxes and charges on withdrawals as well as the guarantees offered by the policy issued. Withdrawals made within a specific time period will be subject to a surrender charge as indicated on the annuity policy. Withdrawals may also be subject to tax consequences if withdrawals are made prior to age 59 ½ including a 10% tax penalty. Guarantees are based upon the claims-paying ability of the insurance company issuing the annuity contract.
Eligibility
Anyone whose AGI is not in excess of $220,000 (joint returns) or $110,000 (single returns) may contribute on behalf of a designated beneficiary who has not reached the age of 18.

Establishment Deadline
Tax filing due date, no extensions.

Total Contributions
$2,000 per child per year. Contribution limit is phased out for AGIs from $190,000 to $220,000 (joint returns) and from $95,000 to $110,000 (single returns).

Deductible Contribution
Not permitted.

Non-deductible Contributions
Non-deductible contributions permitted. See “Total Contributions” for contribution limits.

Catch Up Contributions
No catch up contributions.

Contribution Deadline
Tax filing due date. No extensions.