Ready to retire?  An immediate annuity provides you with a stream of income that starts now.  Still saving? A deferred annuity can also (optionally) provide income payments, but they’re deferred to a future date; in the meantime, your savings accumulate, and you pay no tax unless and until you make withdrawals.

Immediate Annuities

With an immediate (or income) annuity, you generally pay the insurer a single amount in exchange for payments that begin immediately (within 12 months) and can provide you, or you and another person, with lifetime income.  Income for a specified period is also available.  Depending on the option you choose, there may also be a death benefit, where payments continue to your beneficiary for some time after you’re gone. Immediate annuities can be either fixed, with generally unchanging payment amounts, or variable, where payment amounts vary based on the performance of underlying investments such as stocks and bonds. Ordinary income taxes apply to the taxable portion of income payments.  More >

Deferred Annuities

A deferred annuity is a type of personal account intended for long-term savings goals, like retirement. Unlike an immediate annuity, income payments are deferred until a future time. When you’re ready, you can convert your account balance to an income stream that you can’t outlive (or another income option).  Or, you can defer that conversion indefinitely, and simply make withdrawals when needed. More >

You pay no current tax on earnings within your annuity (this is called tax deferral). Your earnings, when withdrawn, are subject to ordinary income tax.  Also, withdrawals of earnings prior to age 59½ are generally subject to a 10% tax penalty (25% for certain SIMPLE-IRA distributions).

When you make withdrawals, early withdrawal charges may apply; these typically decline over the years, finally reaching zero. Also, most deferred annuities offer access to some of your money each year without charge.

Deferred annuities can be fixed or variable; and may be a traditional deferred annuity, or a relatively new type called a deferred income annuity.   

Fixed Deferred Annuities grow at guaranteed* rates declared periodically by the insurer. More >

Variable Deferred Annuities allow you to allocate your purchase payments to various stock and bond-based investment options.  Your account balance then rises or falls based on the performance of the underlying investments and other charges (e.g., a Separate Account charge).  Variable Deferred Annuities also may also offer options for a fee, such as ensuring a minimum death benefit or minimum income amount despite market downturns.*  More >