Variable Annuities

Annuities provide guaranteed income in exchange for a lump sum or premium payments. Variable annuities are a type of annuity contract that has a value that varies based on the performance of an underlying portfolio. They are different from fixed annuities, which provide a specific and guaranteed return.

If you are considering a variable annuity, it may be helpful to learn more about them. Here is everything you need to know about variable annuities.

What Are Variable Annuities?

Variable annuities are a contract between you and an insurance company. They serve as an investment account that may grow on a tax-deferred basis. They include certain insurance features, including the ability to turn your account into a stream of periodic payments. Variable annuities can be purchased via a single payment or a series of purchase payments.

How Do Variable Annuities Work?

Variable annuities offer a range of investment options. The value of your contract is decided by the performance of whichever investment options you choose. In most cases, the investment options are mutual funds that invest in a variety of stocks, bonds, money market accounts, or a combination of all three.

Variable Annuity Features

All variable annuities have key features that make them different from other investment options. For example, variable annuities often have benefits that guarantee a portion of your annuity payments will go to a beneficiary if you die before you are able to collect. You may also be able to set the account to allow withdrawals up to a certain amount each year for the rest of your life.

What features are included in your variable annuity vary, but all of them will be tax-deferred. That means you pay no taxes on the income and investment gains from your annuity until you decide to withdraw from the account, receive income payments, or a death benefit is paid. You can also transfer funds from one investment option to another without incurring taxes. These options make variable annuities a highly flexible investment option.

Find a Variable Annuity

With a variable annuity, you can ensure that you have guaranteed income deep into your retirement. There’s a chance your investment will grow too! If you are interested in purchasing a variable annuity, contact Alite Financial Professionals today. We can help you find a plan that fits your specific lifestyle.

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