You make a one-time payment to purchase your income annuity, select the type of payment suited to your needs, and distributions can begin immediately (and must begin within a year). Income annuities can be fixed or variable, just like deferred annuities. The income payments you receive from fixed income annuities are based generally on the amount of your purchase payment, your age and sex, expenses and the interest rate environment at the time of purchase. The payments to you will not change. The payments from variable income annuities fluctuate and are based on the performance of the investment options you choose. Although payments may go up or down, variable annuities are designed to provide income that can rise over time to help you keep pace with inflation.
Once you purchase an income annuity you generally have no access to the principal amount. Therefore, you should generally keep some of your retirement funds in a more accessible account. If you choose an income for a single life option with no refund guarantee, payments cease upon death and no additional payments or death benefits are provided. You can also purchase annuities with a joint and survivor payment option or annuities with guaranteed payment periods.
When choosing the investment options for your variable income annuity, keep inflation in mind. You want investments that will keep pace with inflation. Variable annuities can let you participate in stock market growth, historically shown to be one of the best ways to combat inflation over the long term. However, the downside is that payments can drop if the market drops. Past performance is no guarantee of future results. If you still want the potential for higher payments, consider dividing your retirement savings between fixed and variable options to provide fixed payments, as well as growth potential.
Variable annuities are offered by prospectus only, which is available from your registered representative. You should carefully consider the product’s features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolios, as well other information about the underlying funding choices. This and other information is available in the prospectus, which you should read carefully before investing. Product availability and features may vary by state. All product guarantees are based on the financial strength and claims-paying ability of the issuing insurance company. The amounts allocated to the variable investment options of your account balance are subject to market fluctuations so that, when withdrawn or annuitized it may be worth more or less than its original value.
