FIXED ANNUITY
Accumulating assets for retirement both safely and competitively can be challenging. Fixed annuities combine three powerful features—tax-deferral, limited accessibility, and guarantees—to help you do just that.
They can be purchased with a single payment, or over time through a flexible series of payments.
Benefits of a Fixed Annuity
- Both principal and interest earnings compound on a tax-deferred basis.*
- A wide range of income options are available at maturity, including a guaranteed lifetime option.
- Some contracts offer a flexible premium payment option.
- No IRS mandated contribution limits (non-qualified funds only.)
- At death, account values pass to your named beneficiary(s) free from the costs and delays of probate.
- Access is available to a portion of your funds to meet emergencies or other income needs without contract penalties.
- Guaranteed interest crediting (typically 1.5% to 3%) ensures growth, regardless of market conditions.
- All guarantees subject to claims-paying ability of the issuing insurance company.
Elements to Consider
- Most fixed annuities come with surrender penalties to discourage early withdrawal.
- Withdrawals prior to age 59½ may be subject to a 10% federal tax penalty.
- Beneficiary(s) owe income taxes on any gain in the contract at death of the owner when the money is distributed; beneficiaries may elect to pay these taxes over a period of time if they select a payment option instead of a lump sum distribution.
All guarantees are made by the issuing insurance company and are based on the insurer's claims-paying ability.
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