Fixed & Variable Annuities

What is a Variable Annuity?

A variable annuity is a long-term contact between you as the investor and the insurance company which combines investment and protection into a single financial product to help address your needs. They are designed with the goal to help provide you with retirement income.

There are generally two types of variable annuities: qualified and non-qualified. If a variable annuity is purchased through an IRA or other qualified plan it will not provide any additional tax advantages (other than the advantages which that plan already provides). Non qualified annuities avoid income tax fees until distributions are made.

Purchases & Withdrawals

Withdrawals will first come from any contract gains and may reduce the death benefit, optional benefits or contact value. Taxable distributions are subject to ordinary income tax and may be subject to a federal income tax penalty if made prior to 59 1/2 years of age. Certain qualified plans may require distributions to begin by age 70 1/2.

Variable Annuities are suitable for long-term investing, such as retirement investing. Withdrawals prior to age 59 ½ may be subject to tax penalties and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

Choosing the Right Fixed Annuity?

Fixed annuities provides a guarantee between you and the insurance company based on both the rate of return (interest rate) and the payout to you as the investor. The predictability of a fixed annuity make it a very popular option for investors who want a guaranteed income stream to supplement their other investment and retirement income. Each contract will explain how and when interest rates may adjust and the terms of the payouts.

We are here to help in your selection of the appropriate investment products for you. It is important to consider your holistic investment and retirement goals when making the right selection. Contact us today to start the discussion on your fixed annuity options.

Fixed annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.