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FIXED ANNUITIES

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What is a fixed annuity?
A fixed annuity is a financial product issued by an insurance company. It minimizes tax liability, while allowing tax-deferred growth of assets. At retirement, a fixed annuity can provide a guaranteed income stream for one or more people, in specified amounts, for a specified period or for life. 1,2

There are basically two types of fixed annuities: a fixed deferred annuity and an immediate fixed annuity. A deferred annuity may be purchased with a lump sum (single premium), or through a series of premiums. Each premium earns a guaranteed interest rate for a specified period - usually one, three, five or six years. An immediate annuity is purchased, generally at or near retirement, by lump sum and is immediately converted into a series of income checks paid monthly, quarterly, semi-annually or annually. Income payout is based on a guaranteed, fixed interest rate. 2

Why would I want one?
Because you want a financial product with predictable growth and stable performance with no stock market volatility. You want a secure retirement income that is not dependent upon circumstances beyond your control. You know that Social Security alone might not provide the retirement income you'll need to maintain your standard of living or cover your monthly expenses. Your employer-sponsored retirement plan could miss the mark as well. A fixed annuity may help fill the resulting income gap.

Fixed annuities appeal to those seeking to defer tax liabilities; who want to offset or avoid the risk and uncertainty of stock market based investments, such as individual stocks or mutual funds. Fixed annuities also offer a way to preserve a rollover from an employer-sponsored retirement plan and lock in a guaranteed interest rate. 2

What's more, by offering simplified asset transfer to your named beneficiary upon your death, an annuity can eliminate the inconvenience and cost of probate.

EXPLORE OUR FIXED ANNUITY PRODUCTS
  1. Withdrawals of taxable amounts from annuities are subject to ordinary income tax and, if taken prior to age 59 ½, a 10% IRS tax penalty may apply. Withdrawal charges may also apply.
  2. All guarantees (principal lifetime income and interest rates) are subject to the claims-paying ability of the issuing insurance company.

GLOSSARY OF FIXED ANNUITY TERMS

A Annuitization
Annuitization converts money into a series of guaranteed retirement income payments. You can choose to receive income for a certain number of years, a set dollar amount, or income based on one or two people's lives. The payout of a deferred annuity may occur years after purchase, while an immediate annuity provides income within the first year. The income payout is based on either a fixed or variable rate of return.

A Annuity
An annuity is a tax-deferred financial product designed to accumulate assets for retirement and is offered by insurance companies. It may be purchased with either a single premium payment or a series of premiums. There are two types of fixed annuities: deferred and immediate.

D Death Benefit
An annuity death benefit is an amount paid to a named beneficiary by an insurance company if the death of the annuity purchaser occurs prior to annuitization (the payout phase). The death benefit proceeds are paid directly to the beneficiary to avoid a time-consuming, costly probate process.

F Fixed Deferred Annuity
A fixed deferred annuity is a tax-deferred retirement product for those looking to accumulate assets at guaranteed, reliable interest rates. Each premium locks in a fixed interest rate for a specific period. Savings grow tax-deferred until they're withdrawn in a lump sum or converted to an income stream.

F Fixed Immediate Annuity
Purchased with a lump-sum, it provides an immediate income stream. You choose the dollar amount, the duration of the payments and whether the income is for one or more people. The amount of your income is based on a guaranteed, fixed rate of return. As is the case with income payments, taxes can be spread over time rather than paid all at once up front.




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