These investments can be a great way to generate retirement income for life. They grow tax-free and you only pay taxes once you start receiving payments which you can receive on a steady basis or as a lump sum.
Tax-deferred annuities 101
Pays a specific, guaranteed rate interest rate on your contributions
Interest rates will vary depending on the investment’s performance
Can provide income almost immediately after purchase in monthly, quarterly or yearly installments
- Withdrawals made prior to age 59½ may result in a 10% IRS penalty
- Guarantees are based on the claims-paying ability of the issuer
- Withdrawals of taxable amounts will be subject to income tax and surrender charges may also apply
- Fixed and variable annuities are suitable for long-term investing such as retirement investing
- Variable annuities are subject to market risk and may lose value
Every investment decision comes with its own risk and reward; diversifying your investment choices can help reduce risk. Learn how to use asset allocation to your advantage when designing your investment strategy.
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May Lose Value
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