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A.E.I. Financial Group

Santa Rosa, Petaluma and Novato Investment Portfolio Analysis, Social Security Maximization and Investment Management

Santa Rosa, Petaluma and Novato Annuities

A.E.I. Financial Group can help eliminate the worries of outliving your income and savings by offering annuities that are designed to provide a reliable cash flow throughout your retirement. Our Santa Rosa, Petaluma and Novato insurance agents can help you choose from a range of flexible plans that will allow you to protect your savings and generate a reliable stream of income for your golden years.

Why Purchase an Annuity?

There are various benefits to purchasing an annuity to supplement your retirement including:

  • Guaranteed income for the duration of the annuity
  • No annual limit to contributions
  • Prior to withdrawal, all interested credited in the annuity is tax-deferred
  • Beneficiaries may be eligible for death benefits

Basic Types of Annuity

Fixed Annuities:

Receive a fixed-rate of interest for a given period of time (ex. 3, 5, or 7 years). A fixed annuity can provide you with a steady income that remains unaffected by market changes. It is important to remember annuities typically have a surrender charge period, where you cannot access the funds in the annuity without a penalty. During this period, the annuity is credited interest based on a specific rate. At the end of the surrender charge period, the owner has options on how to take the funds out of the annuity.

Benefits of a Fixed Annuity:

  • An anticipated return you can count on
  • Income growth potential
  • Tax deferred growth
  • Guaranteed minimum interest rates
  • Some access to your money before the end of the surrender charge period.

Variable Annuities:

Variable annuities offer guaranteed income for life, in addition to the potential increase earnings from underlying investments. Despite a certain level of risk, this type of annuity offers the chance to significantly boost income while offering flexible payout options.

Benefits of a Variable Annuity:

  • Income growth potential
  • Protected lifetime income
  • Legacy protection
  • Tax deferred growth

Annuity Payout Options

There are typically many different annuity payout options. However, we can break those options down into a few common options. These common payout options have unique benefits and drawbacks.

  1. Life Option: this payout option is meant to provide the owner with payouts for the duration of their life. The payouts will typically cease at the owner's death and don't continue to pay to a beneficiary. However, some policies may include a death benefit that is paid to the owner's beneficiary in the event of the owner's death. There are numerous factors that may influence your maximum and minimum payments including age, sex, current interest rates, and cost of living.
  2. Joint and Survivor: this payout option is meant to continue the payouts for the life of the annuity owner and their spouse. Payout amounts are typically calculated based on the life expectancy of both spouses, so the payouts may be lower that the life option.
  3. Fixed Period: this format is payable for a fixed time that is decided by the owner of the annuity. The minimum and maximum payments of this format can also fluctuate based on a variety of factors.
  4. Life with period certain: this payout option is meant to provide the owner with payments for the duration of their life. However, if the owner passes away before a set time period, the payments will continue to a beneficiary for the period of time. Payouts under this option are generally lower than the life-only option.
  5. Lump Sum: many annuities will allow the owner to take a lump sum at the end of the surrender period. The lump sum will include the annuity premiums plus and interest credited to the annuity. The owner may need to pay taxes as ordinary income in one year. It is important to consult a tax professional regarding annuity payout options.

Consult with a A.E.I. Financial Group adviser in Santa Rosa, Petaluma and Novato to answer any of your insurance questions. We look forward to hearing from you!

Annuity Disclosure: Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Any distributions from an annuity may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. Early withdrawals may result in loss of principal and credited interest due to surrender charges.