Variable Annuity Guide

Variable annuities are used for many different objectives. One common objective is deferral of the recognition of taxable gains. Money deposited in a variable annuity grows on a tax-deferred basis, so that taxes on investment gains are not due until a withdrawal is made.

Variable annuities offer a variety of funds ("sub-accounts") from various money managers. This gives investors the ability to move between sub-accounts without incurring additional fees or sales charges.

Typical Variable Annuity Features:

All annuities have three primary advantages: Tax Deferral, Avoidance of Probate, and a Guaranteed Income (optional) for a fixed period of time, or income for life. More specific reasons to invest in variable annuities:

• Aggressive Investment Options
• Better suited for investors with a longer investment period. If retirement is a ways off, higher risk for higher reward may be more suitable.
• Adjustable Sub-Accounts
• Change the make-up of your investment portfolio without tax implications. Switch from a money market to equities with no penalties.
• Guaranteed Rate
• The reason why fixed annuities are so popular, is because they carry a fixed interest rate for the number of years the contract states. This translates into a guaranteed receipt for people who need regular income.
• Very Low Risk
• Money can only be lost if the insurance company becomes insolvent and your investment exceeds Annuity State Guaranty Limits.
• Retirement Income
• Fixed annuities yield a monthly fixed income, which is invaluable for retirees. Secure monthly checks can keep your household expenses sorted, even after you retire.
• 3%-10% Return
• Solid returns for essentially no-risk investment. Better than CDs, especially at longer terms.
• Lifetime Income
• An optional lifetime provision guarantees paychecks for life. No worries about outliving your retirement savings.
• Life Insurance
• Fixed annuities are like life insurance policies, for they come with the provision of death benefit for the remaining family members.
• Unlimited Contributions
• There is no limit on the amount you wish to invest in a fixed annuity, nor is there a restriction on how many policies you should or can own. Choose your amounts and leave behind a healthy inheritance for your family.
• Inheritance
• Bequeath money to loved ones probate-free. Avoid estate/death taxes.
• Inflation Hedge
• Fixed annuities are good inflation hedges as the amount you receive has some amount of interest included in it.
• Tax-Free Gifts

• Gift up to $10,000 per individual, per year, tax-free. Gift money to an unlimited number of individuals.