When you use non-qualified money, your interest is paid to you over the duration of the annuity. This can be a big benefit because it disperses your tax burden. When you use qualified money, all of the income you receive from your annuity becomes taxable. However, after the first calendar year you no longer need to include the amount of money in your annuity in your required minimum distribution (RMD) calculations.

Yes. If you inherit a non-qualified annuity, you will have to pay taxes.

All annuities are tax-efficient saving vehicles because money inside annuities grows tax-deferred so your annual profit is not subject to federal tax or state tax that year. The deferral benefit allows your profit to be fully reinvested into your account, and over time the compounding growth can be significant. For long-term investors or high-income families, annuities tax deferral benefit can be tremendous.

Annuities offer guaranteed income, and guaranteed growth on the Benefit Base regardless of market conditions. They also grow tax-deferred even if they are not part of a tax-qualified account. The volatility is limited and very low. It'll be unlikely to lose money on fixed index annuities, as long as the owner doesn't take over 10% withdrawals too early.

Yes, you can. Movement from a 401k is typically called a rollover. If you transfer funds from 401(k) or IRA into an annuity, no tax consequence as long as the annuity is inside an IRA. Similarly, mutual funds, stocks and bonds can also be inside an IRA. An annuity does not change the IRA classification. When people have separated service from the employer, they often do a 401(k) rollover to an IRA, or Roth 401(k) to a Roth IRA. The IRA can be invested into an annuity. Any IRA, SEP IRA, SIMPLE IRA or Roth IRA can be moved into an annuity at the owner's discretion. Other retirement accounts (457 or 403b) can be rolled over as well. Caution: A 401(k) and a 457 plan have different access rules.","reminder":"\Reminder: Similar to a 401(k), an IRA account also has the 'age 59 1/2 rule' where the IRS requires the owner to wait till age 59 1/2 before taking withdrawals. Exceptions are referred to the 72(t) or 72(q) rules. Please consult with an accountant. The 401(k) rollover or IRA transfer should be completed within the 60-day period.

Annuities are a great choice if you wish to prolong your retirement savings even further, or turn into a guaranteed life-long income. Most other retirement accounts could be depleted during later years. Individuals in their 50s and 60s looking to save additional tax-deferred money for retirement can also benefit from annuities. If you look for moderate growth, guarantee features, or principal protection, annuities can be a great fit. You may also leverage the 'Joint-Life' feature with your spouse's retirement savings, and ensure an income stream covering your lifetime.

\u003col\u003e\n \u003cli\u003eTerms of an annuity are in the policy contract document and/or the illustration, and a buyer should fully review them.\u003c/li\u003e\n \u003cli\u003eAnnuities typically have early withdrawal fees that last for 5-10 years, so make sure you dont need the money you invest any time soon.\u003c/li\u003e\n \u003cli\u003eThough unlikely, annuities can lose value in some circumstances.\u003c/li\u003e\n \u003cli\u003eAnnuities are usually long-term contracts.\u003c/li\u003e\n \u003c/ol\u003e","reminder":"\Reminder: It may be helpful to consider company ratings by rating agencies like Moody's, Fitch, and SP, which are good indicators of a company's long-term financial strength.

Fixed annuities provide a guaranteed rate of return and payout amount, regardless of the purchase amount, stock market fluctuations, or life expectancy. Bonds offer income, but can lose value or be called by the issuer. Fixed annuities typically offer a higher rate of return than CDs, US bonds, or money market accounts. Investment risk in fixed annuities is also comparably low. Unlike fixed annuities, 401(k), ETFs and mutual funds bear a lot of stock market risks. Most other tax-efficient vehicles e.g. 401(k), IRA/Roth IRA, SEP IRA, have an annual limit on contribution amount, but annuities don't.","reminder":"\Reminder: While we classify CDs, bonds and money market accounts as low risk, that is not entirely true. For any of those three to be a good investment, interest rates have to be very high. While there have been periods of time with higher interest rates, more often than not, the risk-averse consumer is getting little or no return 'playing it safe.' It is far more productive to use an annuity which has no downside. The guaranteed rate of the Benefit Base side of an annuity will likely outperform the CD, bond or money market funds.

Mutual funds are securities that invest in stocks, bonds, U.S. Treasuries, or commodities. Annuities are contracts between an individual and an insurance company for a certain payout or yield over a given period of time. Fixed annuities have advantages of tax-efficiency, principal protection and guaranteed lifetime income, while mutual funds have more flexibility in investment options and liquidity.

Most fixed index annuities have a safety guarantee on your principal, with the only exception of taking money out too early. But bonds may lose value so your principal is not totally safe. Historically bonds may lose value quickly in a rising interest rate environment, yet meanwhile index annuities companies tend to offer better contracts with higher Cap or Participation Rate. Opening an account for bonds typically requires less minimal deposit than opening an annuity account. Annuities often provide lifetime income, but bonds pay interest for only a limited period of time. The conclusion however depends on your retirement goals, risk tolerance, and other needs. Caution: In a declining interest rate environment, some annuity companies tend to reduce the Cap or Participation Rate, so your growth potential may decrease.","reminder":"\Reminder: Be prudent to compare bonds with index annuities. Often times stocks and bonds are like a teeter totter. In a good stock year, the stock end of the teeter totter is up and the bond end is down. In a bad stock year, the bond end may be up. Historically seven out of ten years are good stock years. To invest in bonds is to take a lower return 7 out of 10 years. In an annuity, you are not playing that guessing game, and you are also shielded from losses, so it is likely a more productive strategy.