Annuities in Tennessee
Plan for tomorrow with annuities
Are you thinking about your future and retirement planning? Annuities can offer a valuable solution to help make sure your money works for you when you need it most, whether you require funds immediately or at a later time. Let’s explore annuities and why they can be a wise choice for your retirement planning.
What are annuities?
Annuities are financial products that provide a steady stream of income over a specific period, typically during retirement. They are designed to help you secure your financial future by guaranteeing a regular income. Annuities are often purchased from insurance companies and serve as valuable tools for retirement planning.
So, how do annuities work? When you purchase an annuity, you make a lump sum contribution or a series of contributions to the insurance company. In return, the insurance company promises to provide you with a regular income, either immediately or at a future date. The income can be received monthly, quarterly, semi-annually, annually, or lump sum. The amount of income you receive depends on factors such as the type of annuity, the contribution amount, and the duration of the annuity.
Why do people buy annuities?
There are several reasons why people choose to invest in annuities.
Guaranteed income for retirement. One of the primary reasons individuals buy annuities is to secure a steady income stream during retirement. Annuities provide a reliable source of income that can supplement other retirement savings, such as pensions and Social Security benefits.
Tax advantages of annuities. Another significant benefit of annuities is their tax advantages. Depending on the type of annuity, contributions may be tax-deductible. In addition, the growth of your investment is tax-deferred. This means you won't pay taxes on the earnings until you start receiving distributions. Additionally, annuities can help you minimize estate taxes and provide a tax-efficient way to pass on your wealth to your beneficiaries.
Long-term financial security. Investing in annuities offers long-term financial security. Fixed annuities offer a guaranteed interest rate, ensuring your principal remains safe.
Annuity options with Farm Bureau Insurance
Traditional IRA
A traditional IRA allows you to set aside retirement savings on a tax-deductible and tax-deferred basis. This will enable you to earn interest on earnings that would have been lost to taxes. Withdrawals are subject to certain IRS restrictions. There are maximum contribution limits defined by the IRS.
With our IRAs, we review interest rates quarterly while offering a guaranteed rate.
Single Premium Deferred Annuity (SPDA)
This is a great alternative if you have retirement savings that you'd like to transfer into a secure plan. It also pays a competitive interest rate with a guaranteed minimum interest rate.
Roth IRA
This type of IRA is similar to a traditional IRA because it also offers tax-free growth on your retirement savings. However, a Roth IRA is not tax-deductible. The significant advantage of a Roth IRA is that you have already paid taxes on the principal, so the withdrawals won’t be taxed again. This means that the money you set aside for retirement is entirely yours, with no uncertainty about the amount you’ll owe in taxes.
A Roth IRA also offers the benefit of establishing independence from employer-based retirement systems and the flexibility to designate a beneficiary to receive the funds directly from your account.
Single Premium Immediate Annuity (SPIA)
You pay us a single premium which we pay back to you on a periodic basis (monthly, quarterly,etc.). The payments can continue for the rest of your life or for a specific number of years.
Flexible Premium Deferred Annuity (FPDA)
A flexible premium deferred annuity allows multiple premium contributions, offers competitive interest rates, and suits diverse financial goals, including retirement.
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Common questions about annuities
How do annuity payments work?
When you purchase an annuity, you make a lump sum contribution or a series of contributions to the insurance company. In return, the insurance company promises to provide you with a regular income, either immediately or at a future date. The income can be received monthly, quarterly, semi-annually, annually, or lump sum. The amount of income you receive depends on factors such as the type of annuity, the contribution amount, and the duration of the annuity.
Why should I buy an annuity?
One of the primary reasons individuals buy annuities is to secure a steady income stream during retirement. Annuities provide a reliable source of income that can supplement other retirement savings, such as pensions and Social Security benefits.
What’s the difference between a Traditional IRA and a Roth IRA?
The main differences are when taxes are paid and when withdrawals are allowed. With Traditional IRAs, contributions are tax-deductible, and the growth is tax-deferred, but taxes will be paid upon withdrawal. Roth IRAs allow for tax-free withdrawals for qualified distributions; you have already paid taxes on the principal, so the withdrawals won’t be taxed again.
What are the tax benefits of an annuity?
Depending on the type of annuity, contributions may be tax-deductible. In addition, the growth of your investment is tax-deferred. This means you won't pay taxes on the earnings until you start receiving distributions. Additionally, annuities can help you minimize estate taxes and provide a tax-efficient way to pass on your wealth to your beneficiaries.
Not sure which plan is right for you?
Speak with a local Farm Bureau Insurance agent today.
