Your individual investing and retirement goals are unique, and they'll continue to evolve as your priorities do. We've provided the following information about annuities — the various types, the features each may provide, the potential benefits and drawbacks — to help you decide whether adding an annuity to your portfolio suits your long-term financial objectives.
Generally, an annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments, and in return, you get access to a variety of potential benefits. The goal of many annuities is to provide a steady stream of income during retirement. Funds accrue on a tax-deferred* basis, which can help increase growth potential, but may be subject to additional taxes if withdrawn before age 59½.
Some annuities also offer optional benefits for additional fees, such as guaranteed† lifetime income and the opportunity to leave an inheritance. Once you've determined whether an annuity is right for you, your next consideration will be the type of annuity you might choose: variable annuity, fixed index annuity or fixed annuity. Explore the options below to learn more about the different types of annuities and how they may fit in to your financial 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.
†Guarantees are backed by the claims-paying ability of the issuing insurance company.
What is an Annuity? An annuity is a long-term, tax-deferred vehicle designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.
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