You can’t rely on Social Security Income or your employer’s pension plan. Maximize your
retirement investment with plans that offer growth and protect your future income.
A fixed annuity is a long-term, tax-deferred* insurance contract or investment designed for retirement. It allows you to create a fixed stream of income during your retirement through a process called annuitization.
An investor can purchase an annuity with a lump sum or monthly payments. The money is invested for a future date, when the money can be withdrawn by the investor either monthly, quarterly, annually or in a lump sum. That money can also be guaranteed for a specific period or for a lifetime.
If a person has an annuity with a guaranteed 10-year income, and that person dies after five years, the beneficiary will receive payments for the remaining five years.
If a person has an annuity with lifetime payments, beneficiaries receive nothing upon the death of the holder of the annuity. It is possible to purchase an annuity with lifetime payments and a set number of guaranteed years. In that case, if the person dies before the end of the guaranteed years, beneficiaries would receive the remaining guaranteed funds.
Money invested in an annuity can grow tax-deferred*. When the money is withdrawn, only the investment earnings are taxed, not the amount of money invested.
Similar to a 401(k) or other defined contribution plans, money from an annuity can be subject to an additional 10 percent tax penalty – on top of your current tax rate – if it is withdrawn before age 59 ½.
*Tax-Deferred: Tax-deferred means taxes on your interest earnings are postponed until a future point in time. By postponing taxes, your money compounds faster because you earn interest on dollars that would have otherwise been paid to the IRS. This enables you to accumulate more money over a shorter period of time, ultimately providing you with greater income.
Now that you’re positioned to retire … is your nest egg?* (5 min. 17 sec.) https://vimeo.com/114046829 Moving from retirement accumulation “know-how” to distribution? I can help you make the complex simple. This short video will get you thinking about how to position your assets so you can confidently enjoy your retirement years.
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