Annuities

An annuity is an insurance contract blended with investments. There are many different types of annuities, including, and charitable gifting tools and many different benefits to choose from including growth of income base, death benefits, guaranteed income streams and more. Most annuities are now designed to provide for a long-term income stream and many can include the flexibility to withdraw for emergencies and long term care. All annuities are sold by prospectus and have many details including risks and costs, that need to be reviewed to ensure they match up with your goals.

Fixed Annuity

With a fixed annuity, also known as a deferred fixed annuity, you receive a guaranteed amount of interest, which accumulates inside of the annuity contract. The interest is tax deferred, so no income taxes are paid until you take a withdrawal.
A fixed annuity may have high so-called surrender charges, which prevent you from withdrawing money for a period of 5, 10, or more years. But most fixed annuities have a feature that allows you to access as much as 10 percent of their value each year without having to pay the surrender charge.

Tax-sheltered Annuity

This type of annuity allows an employee to make contributions from his income into a retirement plan. The contributions are deducted from the employee's income and, as a result, the contributions and related benefits are not taxed until the employee withdraws them from the plan. An employer can also make direct contributions to the plan.
One specific tax-sheltered annuity is the Internal Revenue Code's Section 403(b) plan. This plan provides employees of certain non-profit and public education institutions the benefit of having a tax-sheltered method of saving for retirement. There usually is a maximum amount that an employee can contribute to the plan.

Charitable Gift Annuity

With a charitable gift annuity, you give assets to a charity in exchange for a tax benefit and a lifetime annuity. When you die, the annuity payments stop, and the charity retains the remaining funds. In a typical charitable gift annuity, the charity usually ends up with a large amount of money.

These annuities are popular because they simultaneously provide a charitable donation, an income tax deduction and a guaranteed lifetime income stream.
Contact us or call us at (757) 599-9111 to learn more about annuities.

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