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Accumulation potential.
Some annuities have the potential to earn interest or credits based on the growth of an external index (we call this “indexed interest”). You can choose from one or more external indexes and crediting methods, depending on your financial goals. Other types of annuities offer growth potential through variable investment options.
Tax-deferred growth.
You don’t have to pay income taxes on the earnings in your contract until you take money out of your annuity. Tax deferral may help the money in your annuity compound over time, for even greater accumulation potential.
Level of protection.
Annuities can help protect the money you place in your contract (the “principal”). Some annuities protect all of your principal from market downturns, while others offer greater potential in exchange for some market risk, including the risk of losing principal.
Retirement income.
After a period of time specified by your contract, annuities provide guaranteed retirement income. Some annuities let you choose from a variety of income options – and some even offer the opportunity for income increases in retirement. These options may either be built in to the contract or optional and available for an additional cost.
case studies.
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“Annuities are long-term financial products designed for retirement purposes. Early withdrawals may be subject to withdrawal charges. Partial withdrawals may reduce benefits available under the contract. Withdrawals of taxable amounts are subject to ordinary income tax and, if taken prior to age 59½, an additional 10% federal tax may apply. Optional income protection features are subject to additional fees, requirements and other limitations. Keep in mind, for retirement plans and accounts (such as IRAs and 401(k)s), an annuity provides no additional tax-deferred benefit beyond that provided by the retirement plan or account itself. Contract and optional benefit guarantees are backed by the financial strength of the issuing insurer.”
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