Why annuities may be a good investment
An annuity is a contract you purchase from an insurance company, designed for long-term investing. The values will fluctuate based on investment option performance. Annuities have restrictions and limitations, and fees and charges will vary based on the product. You may be charged a penalty if you take your money out early. Withdrawals may be subject to ordinary income taxes, and if you are under age 59½, you may pay a 10% federal tax penalty. Please remember that investing involves risk, including possible loss of principal. All guarantees and protections are subject to the claims-paying ability of the issuing insurance company.
1 U.S. head of the household, age 25–64.
2 "Retirement Savings Shortfalls: Evidence From EBRI's Retirement Security Projection Model(trademark)," Jack VanDerhei, EBRI Issue Brief No. 410 (February 2015).
What’s your path?
Help meet your goals with the right product
An investment advisor can tell you about the different kinds of annuities, including:
When you discuss your retirement goals with your advisor, he or she can suggest an annuity — or a combination of annuities — that’s right for your needs.
Your advisor may be aware of different annuity riders or features that can help create smart, tailored and more complete coverage to suit your goals.
Imagine the possibilities for growth
Over time, annuities can accumulate with the advantage of tax-deferred growth. It lets you:
Delay paying taxes
Principal, interest and capital gains may accumulate tax free until you withdraw and take receipt of them; the benefit is that, when you withdraw during retirement, you're likely to be in a lower tax bracket.
By delaying taxes until withdrawal, your account can retain more value; by deferring taxes, you can use the power of compound interest to boost the base of your account with each passing year; over time, it can add up to more retirement wealth.
Some annuity options offer growth potential. Here's how:
You gain buying power
Some investments are beyond reach because minimum investment amounts are too high; annuities can help because you're in a larger group of investors.
You can skip fees or taxes
You may be able to exchange between investments without fees or tax consequences.
You can manage your investments yourself or use a money manager — it's your choice.
Income, legacy and spousal opportunities
Annuities are uniquely designed to be able to provide you with lifetime income options, legacy planning and spousal opportunities.
Achieved through the use of annuitization at no cost or via a lifetime income benefit rider available for an additional cost.
Most annuities have a return of premium standard death benefit (your beneficiary gets back what you put in at a minimum); however, you have the opportunity to purchase enhanced death benefit riders that could increase the amount left to loved ones.
You're able to cover the life of your spouse on your annuity, either on a death benefit or a lifetime income benefit; please note that some carriers may charge a fee for these services.
Plan for what - and who - matters most
ANNUITIES ALSO PROVIDE DEATH BENEFITS TO A LOVED ONE
You can pass your assets to beneficiaries while avoiding the costly probate process. Married couples can also choose spousal protection.
Spousal protection offers security for both of you. With spousal protection, your Mr. or Mrs. is protected in the event that you pass away first. Your spouse then has the flexibility to choose:
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