Are you planning for retirement and looking for an extra income source? Perhaps you are in retirement and looking for an investment that can provide immediate returns? An annuity solution may be right for you. Annuities can provide extra income to get you closer to meeting your financial goals. To help your knowledge on annuities grow, read below to learn more about some of the most FAQ about annuities.
Often, the best time to buy an annuity is in preretirement or retirement to protect the retirement portfolio from any downside. This timing can vary depending on individual situations.
You always want to consult a tax professional, because reasons can vary on whether you would joint-own an annuity or not. It can be beneficial for spouses to jointly own an annuity or be joint-annuitants. For some F&G annuities, this could allow them to share some of the Guaranteed Minimum Withdrawal Benefit, which is an income payment for life.
It depends on your individual financial situation. Often, if someone wants to roll over their 401(k) or protect their IRA, they can do a lump sum payment. Otherwise, there could be benefits to funding an annuity over time.
With F&G products, you can make your IRA or Roth contributions into a contract. A trend in the industry is to convert qualified IRA money over time in subsequent payments, so you don’t have it all in one lump sum.
There are penalty-free withdrawal options on some F&G contracts. Depending on the product, a 10% penalty-free withdrawal could occur in year one for some F&G annuities and in most cases year two and beyond.
Surrender charges and Market Value Adjustment may apply to partial and full surrenders. Surrenders may be taxable and may be subject to penalties prior to age 59 ½.
If you are in the surrender charge period, then there can be penalties. F&G has 3-, 5-, 7-, 10-, 12- and 14-year products, and the penalty associated with each product can vary. If you're under 59 ½ years of age and the withdrawal is qualified as pre-tax money, then the IRS could add a 10% penalty.*
However, it is possible in some cases that the income phase and surrender period may line up. So be sure to discuss your situation with your financial professional to understand what is best for you.
*F&G does not offer tax or legal advice. Information provided regarding tax or estate planning should not be considered tax or legal advice. Consult your own tax professional or attorney regarding your unique situation.
A common concern among retirees is running out of money. Some of F&G’s products can prevent that from happening to a certain degree.
Annuities can have great accumulation, which can leave a legacy for you and your loved ones. Annuities can also have guaranteed income benefits, which is similar to a pension. The majority of employers don’t offer pensions anymore, meaning people are looking for other sources of guaranteed income.
Annuity products can also exist for performance- and inflation-type protection, where you are given an interest credit and a guaranteed percentage to your income base. Combining those can lead to higher potential income for life.
The idea behind the F&G products is that there is protection from downside risk, and you can lock in gains as you go. Annuities can be very beneficial for helping you meet your financial goals and should be considered when planning for retirement income payments.
Is an annuity right for you? Talk with your financial professional to see if an annuity fits your financial needs, and learn more at fglife.com.