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Annuities are
contracts whereby you agree to pay a lump-sum payment or periodic payments
in return for the promise of a regular income, often for life. Annuities
offer tax-deferred shelter for hard-earned dollars. As such, they can be an
excellent choice for individuals or couples who wish to secure funds for
retirement.
Single Premium Deferred
Annuity
By putting off, or deferring, your receipt of payments from
the annuity, you allow your funds to grow over time. If you make one annuity
payment and do not plan to add to it, your annuity is called a Single
Premium Deferred Annuity.
This is a good choice for people who have a large sum
of money available before retirement. Money used to purchase a Single
Premium Deferred Annuity often comes from an inheritance or a lump-sum
distribution from a pension plan.
Immediate Annuity
An immediate annuity is similar to a Single Premium Deferred
Annuity. However, once you make the onetime, lump-sum payment, the annuity
begins to pay within the first year. The payments are guaranteed to last for
life.
Consider an Immediate Annuity if you want to convert
accumulated assets into monthly income payments.
Flexible Premium Deferred
Annuity
With this annuity you can make a series of payments over
time. When the annuity matures, you may elect to receive a monthly income
for the rest of your life.
This type of annuity is called flexible because it lets
you decide how often you want to add funds to your annuity and how much to
add. The more you put in and the sooner you start, the more your annuity
will grow.
Variable Annuity*
This flexible annuity offers tax-deferred growth, access to a
broad range of investment options, guaranteed death benefit, numerous income
payment options and potential for greater accumulated growth, based on the
performance of the investment options you select. It allows for transfers
between the investment options without taxation, dollar cost averaging,
automatic rebalancing and systematic withdrawals.
A variable annuity is a good choice for people who want
a savings plan that can coincide with their life cycle needs by allowing
varying premium amounts and exposure to equity investments over time. They
also want their savings to grow with the potential for more favorable
returns than they can receive on guaranteed fixed-rate investments.
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