Explore: Deferred Annuity

Tax-Deferred Growth Today, Guaranteed Income Tomorrow

A Deferred Annuity is an insurance product designed to help you accumulate savings over time on a tax-deferred basis, with the option to convert your accumulated value into guaranteed income at a future date. It is a long-term retirement planning tool used to grow funds before activating the income phase, often years later.

Unlike Immediate Annuities, which begin payments shortly after purchase, Deferred Annuities have a "growth phase" followed by a future "income phase", allowing you to build retirement assets before drawing income.

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1. Accumulation Phase
During the deferral period, your annuity earns interest or investment returns, depending on the annuity type (Fixed, Indexed, or Variable). This allows your money to grow before income begins—without current income taxes on the gains.

2. Tax-Deferred Growth
One of the primary advantages of a Deferred Annuity is that earnings grow tax-deferred, which means you won’t pay taxes until you start taking withdrawals. This feature can help accelerate long-term savings.

3. Future Income Options
At a later stage, you can annuitize the contract or activate an income rider (if available) to begin receiving regular payments for life or a set number of years, providing financial security in retirement.

4. Principal Protection or Investment Flexibility
Deferred Annuities come in several varieties:

• Fixed Deferred Annuity – guarantees a set interest rate
   
• Indexed Deferred Annuity – links growth to market index performance
   
• Variable Deferred Annuity – offers investment subaccounts with market potential and risk
   

This gives you the flexibility to choose the level of growth potential and risk you're comfortable with.

5. Optional Riders and Benefits
Some Deferred Annuities offer optional features (available for an additional cost), such as guaranteed lifetime withdrawal benefits (GLWB), death benefits, or long-term care enhancements.

6. Surrender Periods and Withdrawal Restrictions
Deferred Annuities often include a surrender period, during which early withdrawals may be subject to fees and potential tax penalties. Many contracts allow free partial withdrawals, up to a specified amount each year.

Deferred Annuities are structured in two main phases:

• Accumulation Phase: Your premium grows tax-deferred through interest or investment performance. You can defer income for several years—or even decades.
   
• Payout Phase: At a time you choose (typically retirement), you can begin taking scheduled income payments or access the accumulated value through withdrawals.
   

The longer the deferral period, the more time your funds have to grow—potentially increasing future income.

Deferred Annuities may be suitable for individuals who:

• Are planning for future retirement income, not immediate cash flow
   
• Want tax-deferred growth on their savings
   
• Seek a customizable product structure (fixed, indexed, or variable)
   
• Prefer to delay income while building a reliable income stream for later
   

They may not be ideal for individuals needing short-term access to funds or those seeking high liquidity without potential surrender charges.

• Deferred Annuities are insurance contracts, not bank products or mutual funds.
   
• Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
   
• Withdrawals prior to age 59½ may be subject to a 10% IRS penalty in addition to ordinary income taxes.
   
• Early withdrawals during the surrender period may be subject to surrender charges.
   
• Riders and optional benefits may involve additional costs and contract conditions.
   
• The type of deferred annuity you choose (Fixed, Indexed, or Variable) will determine the level of market exposure and risk.
   

Always review product brochures, contract terms, and disclosures carefully. Consult with a licensed insurance professional to determine which Deferred Annuity structure best fits your financial strategy.

To learn more or compare Deferred Annuity options, we invite you to:

• Explore product types and accumulation strategies through our Explore & Enroll Platform
   
• Connect with a licensed advisor to customize your retirement timeline
   
• Request and download our guide to long-term annuity planning and tax-deferred savings

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