Annuities are long-term contractual financial products,
issued and guaranteed by an insurance company, and purchased by individuals for
the purpose of transferring a specific risk, such as the risk of outliving
one’s savings.   In this post, we’ll
discuss a few common types of annuities that may help you save for retirement
on a tax-deferred basis, generate guaranteed retirement income, or offer a
complimentary savings vehicle to your 401(k) and/or IRA.

Immediate Annuity

Immediate annuities are typically purchased with a single
lump sum and distribution payments begin right away.  The insurance company promises to make these
regular payments (guaranteed by their claims-paying ability) for a chosen
length of time – most commonly for the remainder of the annuitant’s life.  Immediate annuities may be fixed or variable.

Deferred Annuity

Deferred annuities begin in the accumulation phase with the annuitant
making premium payments into the annuity. 
During the accumulation phase, earnings typically accumulate on a tax-deferred
basis, and the annuitant can decide when to start taking distributions.  Deferred annuities may also be fixed or
variable.

Fixed Annuity

Fixed Annuities offer a fixed rate of return for a specified
time period without any risk to principal. 
A fixed annuity can be annuitized to provide an income payment for a
specified term or for life.

Variable Annuity

Variable annuities do not guarantee a return, and instead,
offer annuitants the ability to invest premiums in professionally managed
subaccounts consisting of stocks, bonds, and money market funds.  They offer the possibility of higher returns,
greater capital accumulation, and a larger income stream, which also exposes
them to market risk and potential losses. 
The only advantage over a regular investment is that the principal is
guaranteed.

This post is a brief overview of common annuities.  To learn more about the features and costs of
annuities, talk to an Amuni representative today.

 

Annuities are
long-term products and may be subject to contract limitations, fees and charges
including M&E expense, sales and surrender charges, administrative fees,
charges for optional benefits, underlying investment expenses, and early
withdrawal penalties and taxes.  Variable
annuities are sold by prospectus only.

Amuni Financial, Inc. is a Broker-Dealer and Registered Investment Advisor. Member FINRA/SIPC. Please see our website for the states in which we’re registered to do business.

1 Comment
  • Robert Angott
    11:26 AM, 16 May 2019

    To register

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