Annuities

Annuities May Be a Smart Fit for Your Investment Plan

Are you concerned about outliving your income? That’s a risk that you may be able to avoid. When you invest in an annuity, you have prepared to receive income in the future, determined by the parameters offered by the insurance contract.

An annuity is a contract you purchase from an insurance company that can grow for a number of years. It is designed to accumulate assets and provide income for retirement. Annuities do have limitations. If early withdrawals occur; penalties may apply and earnings are taxable as ordinary income that may be subject to a 10% federal tax penalty if withdrawn prior to age 59½.

An annuity is traditionally a lump sum of cash invested to produce a monthly stream of income for a fixed period or for life. But there are also options that allow for monthly or bi-weekly contributions to be made as they come available. The interest on these are commonly realized immediately and can reach admirable rates.

Whether your needs are immediate or long-term, you can choose the annuity that works for your situation:

  • Immediate – An immediate annuity is usually purchased with a lump-sum and guaranteed income starts almost immediately. Your investment converts into a guaranteed stream of income that is irrevocable once payments begin. In some situations, funds can be accessed, but some restrictions apply.
  • Fixed – With fixed annuities, the principal investment and earnings are both guaranteed and fixed payments are made for the term of the contract.
  • Fixed Indexed – This special class of annuities yields returns on contributions based on a specified equity-based index, such as the S&P 500.
  • Flow Annuity – An annuity funded on a monthly basis or bi-weekly basis with or without a lump sum contribution.
  • Variable – With a variable annuity, you choose investments and earn returns based on how those investments perform. You can choose investments that offer different levels of risk and potential growth, depending on your investment goals and tolerance for risk. WE DO NOT OFFER VARIABLE PRODUCTS DUE TO THE RISK OF LOSS AND PRODUCT VOLATILITY.

Variable annuities are sold by prospectus. Before you invest, please read the prospectus carefully and consider the investment objectives, risks, charges and expenses of the annuity and its underlying investment options before you invest. Prospectuses for products and underlying investment options contain this and other important information. To obtain prospectuses, call your investment professional or the insurance company.

A fixed indexed annuity offers returns based on the changes in a securities index, such as the S&P 500® Composite Stock Price Index. Indexed annuity contracts also offer a specified minimum which the contract value will not fall below, regardless of index performance. After a period of time, the insurance company will make payments to you under the terms of your contract.