ANNUITIES Grow and protect your savings with annuities

Annuities are long-term insurance contracts that convert your retirement savings into an income stream that you won’t outlive, similar to a pension. Our annuities are tax-deferred, which means you won’t have to pay income tax on any earnings until you make a withdrawal. (Withdrawals prior to age 59 ½ may be subject to a 10% IRS penalty.) Annuities can be customized with add-ons to help protect your money from losing value and/or allow you to leave your money to loved ones should you pass away.

Annuities are often used for retirement planning  and are ideal for people with longer term savings goals. If you are already putting away as much as you can in a 401(k) or IRA, for example, an annuity can be used to boost your savings and provide you with a guaranteed stream of income when it comes time for you to retire. Your agent can help you determine if an annuity might be right for you.

When you purchase a fixed annuity, the premium you pay is invested over a set period of time based on the terms of your contract. During this period (which typically lasts between 10 to 30 years), your money is credited interest without being taxed, which means it earns interest at a faster rate. When you are ready to retire, the money is paid back out to you along with investment income and gains. The payout involves a return of principal (the money you put in). This payout can be distributed as a regular stream of payments to serve as income for the rest of your life.

It depends on the type of annuity you purchase. While all investments carry some level of risk, fixed deferred annuities are fairly safe because they come with a guaranteed minimum interest rate. This means that New York Life assumes all the investment risk, so your payout is not affected by market fluctuation. Annuities are less liquid than some other types of investments. Access to your investment can be affected by taxes and possible surrender charges.

Variable annuities, on the other hand, involve investments that are subject to market fluctuation. While this can mean higher returns and payouts, it can also result in losses depending on how the investments perform. Your financial services professional is always available to provide guidance and help you determine which type of annuity makes the most sense for your specific needs and goals.

Yes. While earnings from annuities are not taxable until you make a withdrawal, those withdrawals are taxed as regular income by the Internal Revenue Service.