Geared Toward Tax-Deferred Earnings: Earn More, Pay Less...
Learn About Tax Deferred Fixed Annuities
Tax-Deferred Fixed Annuities: Less Income Taxes, Faster Earnings Growth
How can I reduce my taxes? How can I make my money work for me? If you are like most individuals, you have asked yourself these questions over and over again--particularly during tax season, when you see the interest earned on your savings substantially reduced by state and federal income taxes.
The answers to both of these problems can be found in the same product: The Tax Deferred Fixed Annuity. Tax Deferred Fixed Annuities offer competitive interest rates, with all interest accumulating tax-deferred for the life of the annuity. Plus, since your earnings remain in your annuity and compound without being taxed, your money is able to grow faster.1
Fixed Annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 1/2 are subject to 105 IRS penalty tax and surrender charges may apply.
Tax-Deferred Fixed Annuities: Safe & Simple To Understand
Contributors trying to save for the future are comfortable with annuities because they are simple to understand. A fixed annuity is a contract issued by an insurance company, which provides a competitive interest rate backed by the claims paying ability of the insurer.
| TO EQUAL A TAX-DEFERRED GROWTH OF: |
| Tax Bracket |
5.00% |
5.50% |
6.00% |
6.50% |
7.00% |
7.50% |
8.00% |
| A TAXABLE PRODUCT MUST EARN: |
| 15%* |
5.88% |
6.47% |
7.06% |
7.65% |
8.24% |
8.82% |
9.41% |
| 27%* |
6.85% |
7.53% |
8.22% |
8.90% |
9.59% |
10.27% |
10.96% |
| 30%* |
7.14% |
7.86% |
8.57% |
9.29% |
10.00% |
10.71% |
11.43% |
| 35%* |
7.69% |
8.46% |
9.23% |
10.00% |
10.77% |
11.54% |
12.31% |
| 38.6%* |
8.14% |
8.96% |
9.77% |
10.59% |
11.40% |
12.21% |
13.03% |
| *Where applicable, add the appropriate state income tax to the federal tax bracket.
Tax brackets effective 1/1/02 based on EGTRRA (Tax Relief Act of 2001) |
Low Minimum Payment
You can open a non-qualified Tax Deferred Fixed Annuity with as little as $5,000. Low minimum requirements, together with various payment options, makes a Tax Deferred Fixed Annuity suitable for many individuals and their different financial needs. Plus, tax-deferred growth through an annuity can be yours regardless of your employment status or age. This feature could differ among contracts.
100% Of Your Money Works For You
The Tax Deferred Fixed Annuities that we offer, unlike many financial products, do not have initial sales charges, so 100% of your money can immediately begin earning interest. However a surrender charge may apply for premature withdrawals.
Easy To Buy, With Various Purchase Choices
You can purchase a Tax Deferred Fixed Annuity by making a single premium payment, or you can choose a flexible premium payment schedule. Your dollars are placed in the annuity, which earns a competitive interest rate.
Access To Your Money
In most cases, Tax Deferred Fixed Annuities allow you flexible access to some percentage of your money. Guidelines regarding withdrawals from Tax Deferred Fixed Annuities differ among contracts, but in most cases they are permitted throughout the life of the annuity. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Withdrawals made prior to age 59 1/2 are subject to a 10% IRS penalty tax and surrender charges may apply. Withdrawals have the effect of reducing benefits and values.
Payment Options: The Choice Is Yours
When its time to take income, choose from a variety of payment options. For example, you may elect to receive a monthly check for the rest of your life, which is backed by the claims-paying ability of the insurer.
Regardless of the payment option you choose, one of the main attractions of a Tax Deferred Fixed Annuity is that you do not need to make your choice at the time you purchase your policy. Rather, you can wait until a later date before deciding how you would eventually like to receive your annuity payments.3
Meets Many Financial Goals
Even if you already have an IRA, Keogh, or 401(k) plan, you may purchase a Tax Deferred Fixed Annuity. It may be used to meet future financial needs such as college expenses, retirement funding and estate planning.
We suggest that you consult with a Tax Deferred Fixed Annuity specialist located in your local branch to determine the appropriate amount of money you should place in a Tax Deferred Fixed Annuity to meet your specific objectives.
Estate Planning Advantage
A Tax Deferred Fixed Annuity offers you a major benefit when used for estate planning purposes. By avoiding probate, it provides an immediate source of funds at death to pay estate taxes and other expenses.3 There may be no need to sell assets, possibly at a loss, to pay these costs.
All Of The Benefits Of An IRA & More
Just like the popular IRA, earnings from a Tax Deferred Fixed Annuity are not taxed until you receive them. However, unlike an IRA, the amount placed in an annuity is not limited to a specific dollar amount. Instead, you can place as much as $500 thousand in some annuity contracts. Upon carrier approval, higher amounts can also be accommodated. Plus, you can make additional payments to existing annuities. Another feature of Tax Deferred Fixed Annuities is that you can also use them as an IRA.4 Depending on your total annual income, this may enable you to receive the benefits of an annuity while still being able to deduct up to $3,000 of your purchase amount from your reported total income when filing your tax return.5 This will, of course, help lower your tax liability.5
- The benefits of tax deferral in an annuity do not apply to contracts purchased as an Individual Retirement Annuity (IRA) inside some other tax-qualified retirement plan, because these plans already have tax deferred status.
- Annuity income from traditional IRAs and other qualified plans is usually fully taxable since this money has typically never been taxed previously.
- Certain restrictions may apply. Consult your own qualified advisor for legal or tax advice.
- Annuities do not provide tax-qualified plans with any additional tax benefits.
- A catch-up provision allows for an additional $1,000 over age 50.
Securities & Insurance products offered through LPL Financial, & its affiliates, Member FINRA/SIPC.
|
Not FDIC Insured |
No Bank Guarantee
|
May Lose Value |
Not A Deposit |
Not Insured By Any Government Agency |
The LPL Financial registered representatives associated with this site may only discuss and/or transact securities business with residents to the following states:
Illinois, Indiana |
