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“Millions of retirees are pouring record sums into annuity accounts.” -The Wall Street Journal 


What is an annuity?

An annuity is a contract whereby a premium is paid by one party (you), and the other party (the insurance company) agrees to pay a stipulated amount (the deposit plus interest) periodically throughout life.

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A message from Denny Southern, Regional VP – American Equity Investment Life, December, 2014

A message from Denny Southern, Regional VP – American Equity Investment Life, December, 2014 from byteship on Vimeo.

  • Annuities date back to the Roman Empire.
  • Schools, hospitals and churches don’t have Social Security –they use annuities to fund retirement.
  • Most annuity companies invest their money in U.S.  Government Securities and highly rated Corporate Bonds.
  • State Lotto Funds and high-salaried athletes use annuities to fund their payouts. 


Tax-Deferred Acccount Status:  No taxes are due on an annuity’s earnings until withdrawn, while interest on a CD is taxed each and every year whether you touch it or not.  Some people have to make quarterly estimated tax payments because of interest they earn on CD’s.

Liquidity:  Annuity accounts are liquid when compared to bank CD’s

  • Some annuities allow interest withdrawals after 30 days.
  • Most annuities allow withdrawals including interest of 10% per year of the accumulated value.
  • All annuities can be converted to an income stream you can never outlive.
  • Most annuities will allow full access to your money in the event you become terminally ill or confined to a nursing home.
  • All required minimum distributions from IRA accounts are made free of any charges.


Triple CompoundingA bank CD only pays interest on your principal and interest on the interest you earned last year, with the last part going towards taxes.  An annuity pays interest on your principal, PLUS interest on the interest you earned last year, PLUS interest on the taxes you would have paid.

No Probate:  This is a very important concern for retirees.  The fact that upon death your funds pass directly to your named beneficiary without the DELAYS, PUBLICITY and COST you might experience if your assets are not in a trust.

Creditor Protection:  With an annuity account, many state statues (Florida being one of them) say “No one can garnish, levy or attach your funds while in an annuity, nor through judicial processes.”

Incontestability:  Since proceeds from an annuity pass directly to a named beneficiary, there is no possibility that your wishes can be contested. 

Annuity accounts clearly give you choices. They represent the cornerstone of any thoughtful savings plan. 

Annuity accounts offer:
  • Safety
  • Liquidity
  • High yields without risk
  • Tax advantages
  • Flexibility
  • Incontestability
  • Creditor protection
  • Privacy protection
  • Long term care and terminal illness protection


What’s right for you?

There are a few different types of annuities; Immediate Annuities, Deferred Annuities, Fixed Annuities, Equity Indexed Annuities and Variable Annuities.  For each type we will offer different options, so you can get exactly what you need. You can begin the process of finding out what’s right for you by calling us today. It’s all based on your life and your priorities.


Immediate Annuities
With an immediate annuity, you pay a single premium and immediately start receiving retirement income payments at the end of each payment period, which is usually monthly or annually.

Deferred Annuities
With a deferred annuity, you pay one or more premiums into the contract over what is often called the accumulation period. The premiums you pay and the interest credited to the premiums goes into a fund called an accumulation fund. Often, there’s a minimum guaranteed interest rate at which your money will accumulate during the accumulation period. The annuity payments you will receive begin at a future point in time called the maturity date. You will receive retirement income payments during a time period defined as the payout period or annuitization phase. You do not pay income taxes on the interest earned during the accumulation period unless you draw on its cash value. These taxes are deferred until the payout period.

Fixed Annuities
A fixed annuity provides fixed-dollar income payments backed by the guarantees in the contract. You cannot lose your investment once your income payments begin. The amount of those payments will not change. With fixed annuities, the company bears the investment risk.

Equity Indexed Annuities
These are a form of annuity, either immediate or deferred, that earns interest or provides benefits that are linked to an external equity index, such as Standard and Poor’s 500 Composite Stock Price Index. When you purchase an equity-indexed annuity, you own the insurance contract—not shares of any stock or index.

Variable Annuities
Variable annuity investments are securities, and fluctuate with economic conditions. The value of a variable annuity depends upon the value of the underlying investment portfolios Associated with the annuity. You, the owner or annuitant, bear the investment risk for the value of the security. The annuity’s value will decrease, however, with a poor investment performance. In fact, you can lose your investment! A product receives the classification of a variable annuity if the value during either the accumulation period or the payout period depends on the value of the security. Some variable annuities provide a choice of either a variable payout or a fixed payout. With a tax-sheltered fixed or variable annuity, you defer income taxes on the interest earned until the payout period. You may also defer taxes on the income used to make premium payments until the funds are withdrawn. There may be a limit on the amount of income you can defer, depending on the tax-sheltered plan selected. These contracts, also known as qualified or “Tax qualified,” must meet the conditions outlined by the Internal Revenue Service. A nonqualified annuity is a product with premiums paid from after-tax dollars.


*Fixed Annuities are long term insurance contacts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Withdrawals prior to age 59-1/2 may result in a 10% IRS tax penalty, in addition to any ordinary income tax. Any guarantees of the annuity are backed by the financial strength of the underlying insurance company.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.

**All investing comes with the risk of losing money.

*Fee based financial planning and investment advisory services are offered through Truvestments Capital, LLC a SEC Registered Investment Advisor.

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