Fixed Annuity Facts
If you want a reliable, steady income stream with the option to leave a legacy for your loved ones, a fixed annuity may suit your financial needs. Fixed annuities are tax-deferred* retirement vehicles issued by insurance companies that grow at a guaranteed rate and offer you the opportunity to turn some or all of your savings into guaranteed income payments for life, or for a set period.
Most fixed annuities have two phases: the accumulation phase, during which your investments have the potential to grow tax-deferred and the distribution phase (also known as annuitization), during which you receive income payments or a lump-sum payment. You also have the opportunity to leave a legacy that allows your assets to pass on to beneficiaries. Fixed annuities' benefits and features vary, so it's important to work with a financial professional to choose a fixed annuity that suits your individual objectives.
This material is intended for educational purposes and does not contain information about specific Jackson products.
*Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA, and may not be available if the annuity is owned by a "non-natural person" such as a corporation or certain types of trusts.
What is an Annuity? An annuity is a long-term, tax-deferred vehicle designed for retirement. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before
Fixed annuities earn a guaranteed† rate of return over the life of the contract, and offer contract owners the predictability of a guaranteed income stream and a way to grow assets without exposure to market volatility.
†Guarantees are backed by the claims-paying ability of the issuing insurance company.
Fixed annuity interest rates are set by the issuing company, based on the underlying investments it holds. Most issuing companies offer a guaranteed rate for a set period, usually for one or more contract years, and can adjust the renewal rate thereafter. Fixed annuities feature a guaranteed minimum interest rate.
During the accumulation phase of a fixed annuity contract, interest credited to your nonqualified contract is tax deferred. Fixed annuities have no contribution limits.
Many fixed annuities offer optional benefits, which may include guaranteed lifetime income, the opportunity to make annual penalty-free withdrawals of a certain portion of the contract, an accelerated withdrawal benefit for certain health conditions, a terminal illness benefit, and an extended care benefit. Fixed annuities offer a standard death benefit of a lump sum payment or withdrawals under an income option of the full value of the contract at time of death.
During the distribution phase of the contract, a fixed annuity can be converted into a series of income payments for your entire lifetime, over a set time period — or one lump-sum payment. If you begin taking withdrawal payments before age 59½, your withdrawals may be subject to additional taxes.
For a more conservative investing approach, consider a Jackson fixed annuity (FA).
Whether you’re saving, retiring or ready to consider a legacy — Jackson can help.
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