Deferred Annuity

Deferred annuities are a tax-deferred investment vehicles used to accumulate wealth. Unlike the immediate annuity, distributions are deferred until a later date, usually during retirement, when clients would then use these assets to help meet their income needs. Income tax on deferred annuities is not paid until withdrawals begin.

The benefits of deferred annuities include:

  • Tax deferral on earnings until distributions begin
  • No contribution limits for non-qualified annuities
  • Qualified tax-free transfers
  • Guaranteed death benefits*
  • The option to have a guaranteed lifetime income stream*
  • Optional riders that have the potential to shield assets from market fluctuation

*Guarantees extend to the claims-paying ability of the issuer.

The risks of deferred annuities include:

  • Costly fees and expenses for the annuity, including riders
  • May have high surrender charges
  • Contributions are not tax-deductible
  • Tax penalties for early withdrawals
  • Income from fixed annuity may not keep up with inflation

Excluding Brokerage and Underwriting Services