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Variable Annuities
A Variable Annuity is an investment
where growth of capital, dividends and interests are all tax deferred. They are sold
by prospectus only, and give the investor the option of investing in a variety of
different sub-account funds. Here are some highlights of what Variable Annuities can offer:
Variable Annuities can be used for
tax deferred long-term investments and gifting accounts for various Charitable Trust
Accounts, and for investments inside of retirement vehicles such as IRAs, 403B Plans, and
more.
Variable Annuities offer death
benefit guarantees which pay upon the death of the account holder to the designated
beneficiaries. This allows the avoidance of probate for death benefit
proceeds.
Investors can switch between
sub-account funds without tax consequences. It is only when money is actually
withdrawn from the annuity that a taxable event occurs.
Once funds are removed from the
annuity and if those funds have a gain in value then they are taxable as ordinary income.
All gains must be withdrawn first before any principal, unless annuitization is elected.
Monies withdrawn from a Variable
Annuity prior to age 59 1/2 might be subject to 10% tax penalty, just like withdrawals
under similar circumstances from a retirement plan.
Variable Annuities can be transferred
from one variable annuity to another variable annuity without any tax consequences.
(Although product surrender penalties may apply)
Monies can be annuitized from the
contract giving the annuitant several options of how the assets are received.
Annuitization is only an option and is not mandatory.
Variable Annuities can offer quite a
bit of flexibility and safety, and can help investors of all ages. Contact The Volkers Group today to learn more about Variable
Annuities and other investment options.
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