Equity-indexed Annuities: Making your Money Work for You

If you’re looking for tax deferral, the ability to enjoy the upsidepotential of stock-market-linkedgains, without ever participating in any losses, equity-indexed annuities may be for you. Equity-indexed annuities are a type of fixed annuity that earns interest based on an external equity reference. When you purchase an equity-indexed annuity, you own a contract with an insurance company that gives you guarantees, not shares of stock. The interest you earn is calculated using a formula
that is based on changes in the index to which your annuity is linked. You can choose the term period during which interest is credited, typically one, five, or ten years. Your
choice will depend upon your liquidity needs. But no matter what term period you select, your equity-indexed annuity is guaranteed to pay a minimum interest rate, even if the index linked rate is lower. The interest credited to your annuity is calculated from the day the money is allocated to the day the term ends, giving you upside market potential without the worry of daily fluctuations. Your principal is secure, and you have the flexibility to extend the annuity’s term if you like. The beauty of an equity-indexed annuity is that, like other fixed annuities, you don’t have to pay income taxes on any earnings until the year you begin to spend the money, and when you do elect to withdraw earnings, you will receive income. The size of income payments is based on both the accumulated value in your annuity and the benefit rate in effect when payments start. Tax-deferred annuities, including equity-indexed annuities, are attractive for a variety of reasons. Because no taxes are paid until the values are accessed, all of your money is working for you all of the time. Your principal investment earns interest and your interest earns interest.
Explore how equity-indexed annuities can helpyou reach your retirement goals. Make your money work for you.

Was this helpful? 0 0 Comments

You're reading Equity-indexed Annuities: Making your Money Work for You.