Tax Deferred Annuities

Variable Annuities

A variable annuity is an investment similar in many respects to mutual funds; however, it offers three basic features not commonly found in mutual funds:

  • Tax-deferred treatment of earnings;
  • A death benefit; and
  • Annuity payout options that can provide guaranteed income for life.

Generally, variable annuities have two phases:

  • The "accumulation" phase when investor contributions (premiums) are allocated among investment portfolios(subaccounts) and earnings accumulate; and
  • The "distribution" phase when you withdraw money, typically as a lump sum or through various annuity payment options.

As its name implies, a variable annuity’s rate of return is not stable, but varies with the stock, bond and money market subaccounts that you choose as investment options. There is no guarantee that you will earn any return on your investment and there is a risk that you will lose money. Because of this risk, variable annuities are securities registered with the Securities and Exchange Commission (SEC). The SEC and FINRA also regulate sales of variable insurance products. 

Fixed Annuities

Fixed annuities are contracts between the insurance company and you that provide tax deferred interest growth. You make payments into an annuity — either one time, or many times — and payments are made to you for a specific period, or over your entire lifetime.

Many people choose fixed annuities for their flexibility and features. Fixed annuities offer a tax deferred way to save for retirement or other needs. But fixed annuities also have other investment features:

  • Earn tax-deferred interest; and
  • You can use annuities to provide guaranteed income for life.

For fixed annuities, typically during the first year you will receive a high rate of interest. Every year after that, you will receive a new interest rate that is guaranteed for that year. The principal of a fixed annuity is guaranteed by the insurance company that issues the annuity contract, and that generally, the greater the financial strength of the insurance company, the less the risk to principal. 

Payout Options

Annuities generally fall into one of two categories: immediate or deferred. Immediate annuities quickly begin making guaranteed payments to you. Deferred annuities generally take longer, but provide you with other important benefits.

(Source: finra.org and sbli.com)

To find out more about tax deferred annuities, please contact our Certified Financial Planner (CFP®):
John V. Lyons, Infinex Investment Executive, 508-234-8112 Ext. 1009, or Email.

Important Information

This website is for informational purposes and nothing on this website constitutes an offer to purchase or sell securities.

For more information about a particular non-deposit investment product, ask for a prospectus. Please read it carefully prior to investing.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC.  UniVest Financial Services is a trade name of UniBank. Infinex and UniBank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

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