Annuities

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.

Types of Annuities

Fixed Annuity
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 (The premiums along with the interest payments continue to grow tax deferred until the money is withdrawn.)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.

Variable Annuity
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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