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- Annuities
What is Annuity?
An annuity is a stream of income. It may last for your lifetime, like a pension, or for some other specified period. Payments can start now (an immediate annuity), or at some time in the future (a deferred annuity). An annuity can help you save for retirement, defer taxes, and allows you to enjoy a steady stream of income for the rest of your life. An annuity can also help maximize your income throughout retirement; a way to cover your basic expenses, allowing you to more efficiently invest your remaining assets to grow your overall portfolio.
Fixed Annuities
A fixed annuity earns a fixed interest rate on your premium. This amount is declared by the insurance company and can change over time and includes a guaranteed minimum interest rate that the contract will earn.
Additional benefits offered by fixed annuities include:
- Tax-deferred growth potential
- Guarantees to your principal
- The option to take a lifetime income stream
- Avoiding probate with a properly named beneficiary other than your estate
Variable Annuities
Whether you want to create income or build up retirement assets, annuities may be your choice. Some annuities will provide tax-deferred with growing asset and thus let you save more for retirement. Others can provide you guaranteed payments for your income during retirement. Some annuities may even provide both of the features. An annuity can be a valuable tool for investors who want to achieve their long-term financial goals. Variable annuities have two phases:
Tax-deferred accumulation phase:
During the accumulation phase, a variable annuity can be a financial vehicle that could help you build your retirement asset. Your money will grow, tax-deferred, as you invest your assets in a wide variety of investment options. You only pay taxes when you take withdrawals.
Retirement income phase:
When you are ready to start taking income, a variable annuity offers a wide array of payout options. You can choose whether you want to receive income for a specific period of time or receive income that you can't outlive.
Lifetime Income
Variable annuities can help keep up with the effects of inflation by offering market growth potential. You need to participate in the market if you want to grow your assets. Market participation is one way to help offset inflation and accumulate the money needed for a longer life.
Death benefit protection
Know that your beneficiaries are protected. A variable annuity assures that if you die before you start taking income, your beneficiaries will receive at least the amount of your initial investment.
Assets Growth potential
Variable annuities let you allocate your money into variable investment options. Diversify your money by choosing a portfolio among stock, bond, and money market options. Variable annuities may also offer enhanced income benefits that provide guaranteed annual increases and gains that may be locked in.
Tax deferral
With a variable annuity, you don't pay taxes while your earnings accumulate, and when you begin withdrawing money from your contract, you only pay ordinary income taxes on your earnings – not on your purchase payments. Tax-deferred growth, compounded over time, may increase the amount of income your variable annuity generates for your retirement.
Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity's features other than tax deferral. Other benefits of using an annuity to fund a qualified plan or an IRA include lifetime income options and guaranteed death benefit payout options. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan.
Variable annuities can help you meet your long-term retirement goals
Your return and principal will fluctuate with market conditions so that units, when redeemed, may be worth more or less than the original cost. Past performance is no guarantee of future results. Withdrawals will reduce the contract value and the value of any income and death benefits. Withdrawals are subject to ordinary income tax and, prior to age 59½, a 10% federal tax penalty. Consider the investment objectives, risks, fees, and expenses of the variable annuity before sending money.
For more complete information about variable annuities and variable investment options, please call 1-888-666-6551 or e-mail to info@infi.biz for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the variable annuity and variable investment options, which you should carefully consider. Please read the prospectuses thoroughly before sending money.
Availability of products, features, and services may vary by state.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Integral Financial at 888-666-6551. Please read the prospectus carefully before investing.