Understanding Annuities

Deferred vs. Immediate Annuities

Decide what's best for you.

Immediate and deferred annuities provide flexibility and can help you protect your savings for the future. Each offers unique benefits and drawbacks. So which makes the most sense for your financial picture?

Deferred annuity

If you're saving for retirement, you may want to consider a deferred annuity. With a deferred annuity, you can:

• Defer taxes. Although a non-qualified annuity doesn't offer the up-front tax deduction you'd receive with a workplace retirement plan like a 401(k) or traditional IRA, you may benefit from tax-deferred growth. Your money can grow faster because you won't pay income tax on any growth until you withdraw the money.
• Save as much as you'd like. Unlike a 401(k) or an IRA, there is no contribution limit.
• Count on a death benefit. If you die before you annuitize the annuity, your heirs will receive the amount you contributed, plus any earnings and minus any withdrawals you've made.

Immediate annuity

Converting a lump sum into an immediate annuity can provide monthly income right away. This type of annuity can help eliminate the risk of outliving your money.

You can use an immediate annuity to:

• Supplement your income. As you near retirement, you may want to transfer some money from a savings account or investment into an immediate annuity. You can also transfer your deferred annuity balance into an immediate annuity.

Mix and match

Deferred annuities and immediate annuities can be fixed or variable. Both are highly flexible products that let you choose the right income stream and the most appropriate investment options for your needs.

A financial professional can help you decide which type of annuity will be best for your long-term financial goals, current needs and risk tolerance.

Working with a financial professional

Can a variable annuity help you meet your retirement-income needs?

Consult your financial professional to learn more