Any interest or earnings in an annuity contract accumulate free of current income tax. Generally, you don’t pay taxes until you take a withdrawal. This means more of your contract value remains available to benefit from potential earnings or interest, creating the potential for faster growth.
Guaranteed2 Lifetime Income Options
Annuities allow the contract owner to choose, within contract limits, when and how to receive annuity income payments. Annuity options are available that can guarantee income for life, for a specific period of time, or both.
Most annuity contracts pay a death benefit to a designated beneficiary if the contract owner dies before annuity payments begin. After annuity payments begin, any death benefit would be based on the type of annuity option selected.
Fund Individual Retirement Accounts1
Annuities can be used to fund individual retirement arrangements, including a Savings Incentive Match Plan (SIMPLE-IRA) or a Simplified Employee Pension Plan (SEP-IRA). These agreements both provide effective ways for you and your employees to save for retirement. Keep in mind that annuities do not provide any additional tax advantages when used to fund a qualified plan. You should consider an annuity to fund a qualified plan for the annuity’s additional features, such as lifetime income options and death benefit protection.