What is an annuity?
An annuity is a unique financial vehicle designed to help people either accumulate money for their retirement as in the case of an “investment annuity,” or turn their retirement savings into income, generally referred to as an “income annuity.” There are two types of investment annuities that may help individuals save for retirement: fixed and variable. Fixed and variable annuities offer tax deferral, a death benefit for loved ones, and the option to receive income for life in addition to other features and benefits that are specific to each. Note that tax-qualified plans already provide tax deferral so an annuity does not provide any additional tax benefits. Keep in mind that since they offer insurance and investment features, annuities may be subject to additional fees to which other tax-qualified plan funding vehicles may not be subject. All guarantees, including death benefit payments, are dependent on the claims paying ability of New York Life Insurance and Annuity Corporation.
A fixed annuity is a product that is designed to help you accumulate funds for your retirement. The money in your annuity earns a guaranteed fixed rate of interest and your money accumulates on a tax-deferred basis, meaning you do not pay taxes on your earnings until you actually withdraw them from your policy. Withdrawals are subject to ordinary income tax, and if they are taken before 59½, an additional 10% IRS penalty may apply (the penalty tax is increased to 25% in the case of distribution from a SIMPLE IRA within the first two years of your participation in the SIMPLE IRA plan.)
General information regarding our fixed annuities may be found in our New York Life Fixed Annuities brochure and our New York Life Fixed Annuities Product Comparison Card.
For more specific information on one of our fixed annuity products, select the link below to view that product’s Fact Sheet.
- New York Life Secure Term Choice Fixed Annuity
- New York Life Preferred Choice Fixed Annuity
- New York Life Secure Term MVA Fixed Annuity
- New York Life Flexible Premium Fixed Annuity
Variable annuities are long-term investment vehicles used for retirement savings. A variable annuity is a contractual agreement in which payments are made to an insurance company, which agrees to pay out income at a later date. You allocate your money among a variety of underlying funds and/or a guaranteed Fixed Account,2 and your money accumulates on a tax-deferred basis, meaning you do not pay taxes on your earnings until you actually withdraw them from your policy. In addition to surrender charges, withdrawals may be subject to ordinary income tax and a 10% IRS penalty may apply to withdrawals taken before 59½. This penalty tax is increased to 25% in the case of a distribution from a SIMPLE IRA within the first two years of your participation in the SIMPLE IRA plan.
Assets allocated to the investment options are subject to market risks and may fluctuate in value, and values upon redemption may be less than the original amount invested. Guarantees do not apply to the investment performance or the safety of the underlying funds in the variable annuity. There are fees and expenses associated with this contract. Please see the product prospectus for more complete details.
For more specific information on one of our variable annuity products, select the link below to view the product’s prospectus, Fact Sheet, Accumulation Unit Values, and Performance Summary. Products are only available in approved jurisdictions.
- New York Life Complete Access Variable Annuity
- New York Life Flexible Premium Variable Annuity II
- New York Life Premier Variable Annuity
- New York Life Premier Plus Variable Annuity
- New York Life Income Plus Variable Annuity
Investors are asked to consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. Both the product and the underlying fund prospectuses contain this and other information about the product and underlying investment options. Please read the prospectuses carefully before investing.
1 Securities offered through NYLIFE Securities LLC (member FINRA/SIPC), A Licensed Insurance Agency.
2 The Fixed Account is backed by the assets in the general account of NYLIAC, a wholly owned subsidiary of New York Life Insurance Company. The Fixed Account is not available on all products in all jurisdictions and with all riders.
New York Life Annuities are issued by:
New York Life Insurance and Annuity Corporation (NYLIAC) (A Delaware Corporation)
51 Madison Avenue
New York, NY 10010
Variable Annuities are distributed by:
NYLIFE Distributors LLC (member FINRA)
169 Lackawanna Avenue
Parsippany, NJ 07054
NYLIFE Securities LLC, NYLIAC and NYLIFE Distributors LLC are wholly owned subsidiaries of New York Life Insurance Company.
In most jurisdictions the policy form numbers are as follows: New York Life Premier Variable Annuity (208-191); New York Life Premier Plus Variable Annuity (208-192); New York Life Complete Access Variable Annuity (208-190); New York Life Flexible Premium Variable Annuity II (ICC11-P110; in some states it may be 211-P110 and state variations may apply); New York Life Flexible Premium Fixed Annuity (ICC10-P108; in some states it may be 210-P108 and state variations may apply); New York Life Secure Term Choice Fixed Annuity (ICC11-P113; in some states, it may be 211-P113 and state variations may apply); New York Life Preferred Choice Fixed Annuity (ICC11-P116; in some states, it may be 211-P116 and state variations may apply); New York Life Secure Term MVA Fixed Annuity (ICC10-P111; in some states it may be 210-P111 and state variations may apply.
Questions about this article or about New York Life, our subsidiaries, and the products that we offer? Please call this toll-free number 800-710-7945 to arrange for a discussion with a New York Life Agent or a NYLIFE Securities LLC Financial Services professional.
This material is for informational purposes only. Neither New York Life nor its Agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.