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North Carolina Annuity

What is an annuity?

An annuity is a financial product designed to provide a steady stream of income over a specified period or for the rest of one’s life. The purchaser makes either a lump-sum payment or a series of payments into the annuity, and in return, they receive regular disbursements, often monthly or annually.

Annuities can offer various payout options, including fixed, immediate, or indexed, each with its own risk and return profile. They are commonly used for retirement planning to ensure a consistent income stream during one’s later years.

Annuities can also have tax advantages depending on the type and jurisdiction, making them attractive for retirement savings.

Flexibility For You!

Our extensive selection of annuities provides competitive options tailored to your needs. Whether you seek asset accumulation, retirement income generation, or creating a legacy for your loved ones, we have a solution for you.

Benefits of an annuity

  • Steady Income Stream: They offer a reliable source of income, providing regular payments over a specified period or for life, helping to maintain financial stability.
  • Tax Advantages: Depending on the type of annuity and jurisdiction, they may offer tax-deferred growth, meaning you don’t pay taxes on earnings until you withdraw them, potentially reducing your tax burden.
  • Customization: They come in various types, including fixed, variable, or indexed, allowing you to choose the one that best fits your risk tolerance and financial goals.
  • Retirement Planning: They are commonly used for retirement planning, ensuring a steady income during retirement years when other sources of income might be limited.
  • Asset Protection: In some cases, they offer creditor protection, shielding your assets from legal claims or judgments.
  • Legacy Planning: They can be structured to provide for beneficiaries, allowing you to leave a financial legacy for loved ones after your passing.
  • Lifetime Income: Certain types of annuities, such as immediate annuities or lifetime income riders, guarantee income for life, providing peace of mind and security in retirement.
  • Flexibility: Many offer flexible payout options, allowing you to tailor the payments to your specific needs, whether you require a lump sum, periodic payments, or a combination of both.

Fixed Annuity

A fixed annuity is a contract where the insurance company guarantees a fixed rate of return on the invested principal for a specified period. During this time, the annuitant receives regular payments, which can be immediate or deferred to a later date.

Fixed annuities provide a stable and predictable source of income, making them popular choices for individuals seeking financial security, especially during retirement. The fixed rate of return shields the annuitant from market fluctuations, offering a level of stability and peace of mind.

They are known for their simplicity and reliability, making them suitable for conservative investors or those with a low tolerance for risk.

Fixed Indexed Annuity

A fixed indexed annuity combines features of both fixed and variable annuities. It offers a guaranteed minimum interest rate, like a fixed annuity, while also providing the potential for higher returns linked to the performance of a specific stock market index, such as the S&P 500. However, the annuitant’s principal is protected from market downturns, ensuring that it won’t decrease due to poor market performance.

This hybrid structure allows investors to participate in market gains while minimizing downside risk. They typically offer various crediting methods and participation rates, allowing investors to choose the level of market exposure and potential returns that suit their risk tolerance and financial goals. They are often favored by individuals seeking a balance between security and growth potential in their retirement savings strategy.

Immediate Annuity

An immediate annuity begins paying out income to the annuitant shortly after the initial investment is made. Unlike deferred annuities, which have an accumulation phase where the funds grow before payouts begin, immediate annuities provide an immediate stream of income.

The annuitant typically makes a lump-sum payment to the insurance company, and in return, receives regular payments for a specified period or for life. Immediate annuities are commonly used by retirees looking for a steady and predictable source of income to cover living expenses during retirement. They offer the advantage of immediate income without the need to wait for an accumulation period to pass.

Multi-Year Guaranteed Annuity (MYGA)

A multi-year guaranteed annuity (MYGA) is a type of fixed annuity and a tax-deferred alternative to a traditional certificate of deposit (CD) that offers a guaranteed interest rate for a specified period, typically ranging from three to ten years. During this period, the annuity holder’s principal is protected, and they receive regular interest payments based on the guaranteed rate.

MYGAs provide a predictable and stable source of income, making them suitable for individuals seeking to preserve capital and generate steady returns. Unlike other fixed annuities, MYGAs do not have annual reset periods, meaning the interest rate remains fixed for the entire contract term.

Upon maturity, annuitants can choose to renew the contract, withdraw funds, or convert to another annuity option. MYGAs are often used for retirement planning and offer tax-deferred growth, meaning taxes on earnings are postponed until withdrawals are made.

We are always here to help with your planning and questions…
Talk to one of our annuity consultants today at 336-346-1440 or contact us here.

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