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Great Start! Now What?

Saving for retirement using an annuity is a great option.  Annuities help your employees save and and give them the potential to grow their retirement nest eggs.  If they are saving in a 403(b) or 457(b) plan, that savings in the annuity is tax-deferred, meaning it goes in before they pay taxes on it and any growth is tax-deferred.  They only pay taxes when it comes out at retirement ((when they may be in a lower retiree tax bracket). 

But did you also know there are different kinds of annuities? Here are a few of the most common annuities.

A Few Kinds of Annuities:

Deferred Income Annuities (DIA) take a single premium or recurring contributions and defer your payout to a later date such as retirement.

Single Premium Immediate Annuities (SPIA) take a lump sum and start paying you out consistent payments for a certain period of time or for your life depending on the contract.

Variable Annuities do not pay a fixed crediting rate, instead they track the performance of an identified sub-account investment which may go below zero.  That means that Variable Annuities may lose money and principal. 

Fixed Indexed Annuities – “the best of both worlds” – these are the annuities offered by National Life Group. These annuities credit interest based in-part on a market index up to a certain level or cap when the index is up for the crediting period. They also have a “fixed” floor so they are guaranteed not to lose a penny due to market changes* when the underlying index goes down into the negative. 

National Life Group’s Fixed Indexed Annuities come with other benefits too!

Security of stable lifetime income never to be outlived by you (and your spouse), and/or guaranteed for a certain period depending on how you would like to receive your payments. There are many flexible options available at retirement, many including a death benefit for your beneficiaries.

Simple – fixed annuities are simple to save for using recurring contributions and simple to receive guaranteed payouts at retirement without worrying about the effects of the stock market or varying interest rates.

Potential – indexed annuities have the potential to credit more interest than a traditional fixed annuity since crediting is based in-part on a market index.

Deferred Tax Treatment – a tax-deferred strategy allows you to avoid paying taxes on the contributions and growth of your retirement plan.  Then when you retire and start taking distributions, you will pay taxes, but you may be in a lower tax bracket, paying lower taxes on your distributions.

Premium and earnings guaranteed – the premiums paid and interest earned in fixed and fixed indexed annuities are guaranteed not to decline due to market changes.*

Guaranteed Lifetime Income – annuities have been traditionally valued as retirement products because they are designed to provide guaranteed income for life. Some of National Life’s annuities also offer income riders that provide additional flexibility to start and stop income and provide access to the remaining cash value.**

No Sales Charges – unlike many investment products, fixed and indexed annuities have no sales charges.***

Contact us to learn more about how you can get National Life Group Fixed Indexed Annuities added to your plan today!

Fixed and Fixed Indexed Annuities issued by Life Insurance Company of the Southwest.

*Assuming no withdrawals are made during the withdrawal charge period. Rider charges continue to be deducted regardless of whether interest is credited.
** Income riders incur an additional cost and rider charges continue to be deducted regardless of whether interest is credited. Riders may be optional, and may not be available on all products or in all states.
*** A few states require the payment of premium taxes on annuities either at the time the company receives the money, upon Annuitization or withdrawal. If we must pay such taxes, we will deduct them from your Policy benefits at that time. Some riders also incur a charge.

Because they are meant for long-term accumulation, most annuities have withdrawal charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. In addition, withdrawals prior to age 59 ½ may be subject to a 10% Federal Tax Penalty. All withdrawals made from annuities with pre-tax contributions are taxed as ordinary income. All withdrawals from an annuity purchased with non-qualified monies are taxable as ordinary income only to the extent there is a gain in the policy. Guarantees are dependent upon the claims-paying ability of the issuing company.

A Fixed Indexed Annuity (FIA) is usually a fixed annuity whose interest is determined, at least in part, by the performance of a specified index of the market. Unlike traditional fixed annuities, the policy owner may receive zero interest for a single period on a specific premium payment if the index performs poorly. However, with most designs, the premiums are protected and guaranteed to grow over time, and the owner of a fixed indexed annuity may experience better interest crediting than a traditional fixed annuity during periods when the market performs well. Indexed annuities do not directly participate in any stock or equity investments. An investment cannot be made directly into an index. Most FIAs permit owners to participate in only a stated percentage of an increase in an index, and also impose a “cap rate” that represents the maximum annual account value percentage increase allowed to contract owners.

Securities and advice regarding securities can be offered solely by representatives registered to offer such products or services through a broker/dealer or registered investment adviser. Investing involves risk, including the potential for loss of principal.

Variable annuities are sold by prospectus only, which contain more information. Please read it and consider carefully the product’s objectives, risks, expenses and charges before you invest or send money. The prospectus contains this and more information about the investment companies.

This is not a solicitation of any specific annuity contract.