What are the benefits of an annuity? Annuities offer a stream of income, provide tax advantages, can grow tax-deferred over time and have no contribution limits. In the event of death, annuities also offer riders that allow you to transfer money to your beneficiaries.
Annuities are good vehicles for:
The 4 types of annuities
Rolling an IRA into an annuity is also a tax-free process. Annuities funded with an IRA rollover are “qualified” plans. This enables insurance companies to create “IRA annuities” into which an investor can directly deposit their retirement funds. Additionally, there are no distribution taxes either.
While pension and other pre-tax distributions can be subject to taxation when withdrawn, federal law permits prospective investors to roll their payments into an immediate annuity tax-free. And of course, the funds within the annuity will continue to grow tax-deferred.
By rolling an IRA into an annuity with a lifetime income benefit, an investor can enjoy an income stream based on a predetermined and guaranteed rate, even in a down market. Recent market turbulence only serves to strengthen this point. Throughout the country, millions of workers approaching retirement have discovered that their plan balances are now too low to provide them with the income they need when they stop working. Furthermore, in addition to providing protection to one’s beneficiaries, certain annuities have inflation adjustment features to ensure that lifetime income keeps up with increased cost of living.
Get matching funds on certain annuities to create increased income for retirement
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