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Life Planning Center > Investing For Retirement
Annuities
  • Annuities
  • Are Annuities For You?
  • Types of Annuities
  • Understanding the Fees
  • Things to Consider When Selecting an Annuity

Annuities

An annuity is another way to set aside retirement savings on a tax-deferred basis. Unlike IRAs and Keoghs, an annuity is the actual investment product.

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An annuity is a contract you enter into with an insurance company. For a fixed sum of money, the insurance company promises to pay you income starting today (immediate annuity), or income sometime in the future (deferred annuity).

  • An immediate annuity provides a stream of payments based on your age, gender and the amount of money invested, and the payment option you select. Immediate annuities are primarily for people who require a fixed monthly income and/or may have difficulty managing their own money.
  • A deferred annuity allows you to contribute money with the potential to grow tax-deferred until you withdraw the money and its earnings at some future date.

Deferred annuities are used for retirement planning. You typically make one or more premium deposits, and the insurance company invests your premiums. You don't pay any tax on the internal buildup of the annuity's value until you begin taking distributions, usually during retirement. A number of payout options are available; the most common offers fixed payments for life.

IMPORTANT NOTE: Annuities are long-term investments. If you begin distributions before age 59½, you may be subject to a 10% penalty on the portion of the withdrawal that represents accumulated earnings. In addition, the earnings are subject to ordinary income tax. Finally, the annuity may impose surrender charges on withdrawals that exceed a certain amount during the early years of the contract) (see the section Understanding the Fees).

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:

Not NCUA Insuredor Any Other Government Agency No Credit Union Guarantee Not Credit Union Deposits May Lose Value

The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NJ, PA, NY, DE, AZ, MI, FL, MD, TX, VA, GA, NC.



Financial Learning Center content created by TrueBridge, Inc. The information provided is based upon sources and data believed to be accurate and reliable. The content contained herein is intended for information and illustrative purposes only, should not in any way be construed as a personal recommendation, and should be used in conjunction with individual professional advice.

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