FIXED ANNUITIES pay a designated rate of return. They’re designed for people who want to set aside money and draw a fixed amount of income. They provide a high level of predictability along with flexible payment choices.
- Guaranteed rate for a specific time period.
- Protected from market downturns.
- You may not have to pay taxes on any interest earned until you withdraw money.
- You may have access to your funds at any time, although there may be charges and a tax penalty for early withdrawals.
Example: 3.50% annual interest rate guaranteed for a 5 year contract.
INDEX ANNUITIES have a rate of return that’s tied to a market index, like the S&P 500. They’re designed for people who want to take advantage of gains in the stock market with some level of protection against losses. When the index increases, you get a portion of that gain based on what’s specified in your annuity contract. If the index declines, you won’t get a return, but the principal of your annuity won’t be affected, either.
- You do not need to pay taxes on any income earned until money is withdrawn.
- Death benefit features may be available.
- There may be charges and a tax penalty for early withdrawals.
Example: 6.25% cap on S&P 500, 1 year point-to-point on 5 year contract.
For an annuity illustration or client review e-mail the following details to sdunn@madisonbrokerage.com:
- Client:
- Age:
- Premium:
- State:
- Fixed or FIA:
