An annuity is a unique financial vehicle designed to
help people accumulate money for their retirement and
turn a lump sum of money into a guaranteed stream of
income. Once a payout period begins it can span the
entire length of a person’s life.
Annuities offer the following unique benefits.
For more details.
- Ideal for Estate Planning
- Power of Tax Deferral
- No Contribution Limits
- Flexible Payment Options
- Tax Control
- Easy to Start and Maintain
Types of Annuities
A fixed annuity is a financial contract between an individual
and an insurance company. An individual gives the company
a lump sum premium, or a series of smaller payments,
and in return, the insurance company agrees to repay
the principal balance along with a fixed rate of interest.
(The premiums along with the interest payments continue
to grow tax deferred until the money is withdrawn.)
The length of time for which companies will guarantee
their rates will vary from annuity to annuity. This
time span can cover anywhere from several years to an
individual’s entire lifetime.
A person has the option of choosing between an immediate
or a deferred payment distribution. As the names would
imply these options determine whether the individual
begins receiving payments at the present moment or at
some period in the future. These distributions are either
guaranteed for a certain period of time or for the entire
life of the individual (regardless of how long he may
live). However, the amount of the payments will vary
depending on how much the individual paid and when the
disbursement of funds began.
Fixed Annuity Disclosure:
- Product and product features vary by state and insurance company.
- Guarantees are based on the claims paying ability of the issuer.
- Withdrawals made prior to age 59 1/2 may result in IRS penalty.
A variable annuity is similar to its fixed annuity counterpart
in that it is a financial contract made with an insurance
company. In return for receiving premiums a company
agrees to repay an individual the principal plus interest.
However, a variable annuity’s rate of return will fluctuate
over the term of the contract.
These annuities allow individuals to control their own
financial destinies to a certain extent. At the time
that the premiums are paid, people are given a choice
of where the money should be invested. These investments
are called subaccounts and are similar to mutual funds.
The performance of these investments will determine
the level of interest that an individual will receive.
Typically, variable annuities provide a higher rate
of return than fixed annuities.
Variable Annuity Disclosure:
- You should consider a variable annuity’s risks, charges, and expenses carefully before investing. Contact your Financial Advisor to request a prospectus, which contains this and other information about a specific variable annuity. Read it carefully before you invest.
- Past performance is no guarantee of future results. Investment return and principal value of a a variable annuity will fluctuate, causing shares, when redeemed, to be worth more or less than their original cost. Withdrawals made prior to age 59 1/2 may result in IRS penalty. Guarantees are based on the claims paying ability of the issuer.
Financial Advisors of LPL Financial are Registered Representatives with, and Securities, Advisory Services and Insurance Products are offered through LPL Financial and its affiliates, Member FINRA/SIPC. LPL Financial is not a registered broker/dealer. Investments are: Not FDIC insured, may lose value, are not bank guaranteed, and are not obligations of LPL Financial. LPL Branch Office located at 1311 Carolina Ave, Washington, North Carolina 27889. Investment Advisory Services offered through LPL Financial, a SEC Registered Investment Advisor
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