Annuity – Individual Retirement Plans


An annuity is a contract that requires regular payments for more than one full year to the person entitled to receive the payments (annuitant). You can buy an annuity contract alone or with the help of your employer.

Annuity Maximization for Individual Retirement

Do you hold an annuity and find you no longer need the income stream it can provide?

You may have used annuities as a savings vehicle as part of your financial plan. However, now you may find that you no longer need the money in the annuity and you want to pass the money on to your heirs. But did you know that the gains on your annuity (the portion that exceeds your original investment) will be taxable income to your heirs?1 In addition, the full value of your annuity is includible in your taxable estate, which could result in a diminished inheritance. By using life insurance to help maximize your annuity funds, you can provide your loved ones with the most value for your annuity funds, without the limitations of income or estate taxes.

Why Annuities for Retirement Plan?

We want you to make an informed decision when you consider the purchase of an annuity. Annuities are an excellent tool to help you plan for your financial security. Annuities offer a variety of benefits including tax-deferred growth, ability to avoid probate, and lifetime income. 

Tax-deferred growth allows your money to grow faster because you earn interest on dollars that would otherwise be paid as taxes. Your principal earns interest, the interest compounds within the contract, and the money you would have paid in taxes earns interest. The chart to the right shows the impact of a tax-deferred annuity.

Annuities offer the ability to name a beneficiary, which may minimize the expense, delays, and publicity that comes with probate. Your named beneficiary may receive death proceeds as either a lump sum or monthly income.

Life Insurance Company can provide you with a guaranteed income stream with the purchase of a tax-deferred annuity. You have the ability to choose from several different income options, including life or a specific period. With non-qualified plans, a portion of each income payment represents a return of premium that is not taxable, reducing your tax liabilities.

Common Types of Annuities

Offers a declared fixed interest rate that is guaranteed for a specific period and guaranteed to never go below a specific percentage.

Interest rate credited to your annuity contract is linked to specific market indices that you can choose on an annual basis. Once the interest is credited you are guaranteed that it can never go down based on future market fluctuations.

Plan for retirement with a wide range of investment options, professional portfolio management, tax deferral, income options, and death benefits. Variable annuities can help increase your income for retirement and guarantee it lasts a lifetime.

Pay a fixed amount at regular intervals during an annuitant’s life, ending on his or her death.

Pay a fixed amount to the first annuitant at regular intervals for his or her life. After he or she dies, a second annuitant receives a fixed amount at regular intervals. This amount, paid for the life of the second annuitant, may be the same or different from the amount paid to the first annuitant.

A retirement annuity purchased by an employer for an employee under a plan that meets certain Internal Revenue Code requirements.

A special annuity plan or contract purchased for an employee of a public school or tax-exempt organization.

You are guaranteed an income stream ranging from a specific period of time to your entire life. An immediate annuity offers a solution to the problem of outliving your money.

Investment advisory services offered through Allmerits Asset, LLC, a Registered Investment Adviser firm. Allmerits Asset does not provide legal or tax advice. Investment Adviser Representatives of Allmerits Asset may only conduct business with residents of the states and jurisdictions in which they are properly registered or exempt from registration requirements. Insurance and Annuity products are sold separately through Allmerits Financial and Insurance Service. Securities transactions for Allmerits Asset clients are through Trust Company of America, TD Ameritrade, Nationwide, John Hancock and American Funds.