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Elevate your financial future with an annuity
When you envision a future that fulfills you, maybe you see yourself traveling, cooking, spending time with family or discovering a new hobby. When you purchase an annuity, you’re taking an important step to help make your dreams a reality.
In investment, an annuity is a series of payments made at equal intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments, and pension payments. Annuities can be classified by the frequency of payment date
Annuities are used mainly to supplement more traditional sources of retirement income such as Social Security and pension plans.
Common features include:
Tax-deferred growth.
You will pay no income taxes on the earnings from your annuity investments until you begin making withdrawals or receiving periodic payments. Note that withdrawals prior to age 59½ may be subject to an additional 10% tax
Unlimited contributions.
Generally speaking, there is no limit to the amount of after-tax money you can put into an annuity, regardless of your income level or sources of income.
Choice of investment options.
Fixed annuities offer a stated rate of return for a specified period of time. Variable annuities include a variety of investment options, such as stocks, bonds, and money market instruments, that fluctuate with market conditions.
No mandatory withdrawals.
If your annuity is not part of an IRA or a qualified retirement plan, you are not required to begin taking minimum distributions after age 72.
Death benefit.
Payout methods, in general, include insurance features that guarantee payment to your designated beneficiaries if you die before withdrawals begin. In most
Lifetime income benefits.
Typically, you will have several options for receiving annuity payments for the rest of your life, including the choice of continuing payments to beneficiaries for a set period of time.
Balance costs and benefits
Lifegenie offers a robust annuity partner portfolio
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An annuity may be an appropriate retirement vehicle if you are able to forgo the use of the money for several years. Yet, keep in mind that owning an annuity may entail higher fees and expenses than some other investment vehicles.
Fees charged for annuities include the additional expenses of insuring the death benefit, living benefits, and other guarantees — this is on top of the expense ratios of any underlying investment funds. Also, look at annual contract charges and surrender charges the issuing insurance company may impose on withdrawals taken during the initial years of the contract.
Before committing to an annuity contract, investigate fully the insurance company's stability and financial strength through an independent agency such as Moody's, Standard & Poor's, or A.M. Best Company. Also, please refer to your contract's prospectus for detailed information about how withdrawals can affect your annuity's death benefit and/or your living benefit.
types of annuities
