Fixed Interest Tax-Deferred Annuities
——
A steady source of income for the
future
The principle behind any annuity
investment product is simple--Invest money now and you will have a steady
source of income for the future.
A fixed interest annuity is a tax-deferred investment
vehicle packaged as an insurance product. When you buy
an annuity from the American Fraternal Union, the earnings
are tax-deferred until you begin withdrawing the money.
Because you're not paying taxes along the way, you have the
opportunity to earn gains on untaxed money, and it grows quicker
than a taxable account does.
An
annuity has two phases: the accumulation phase and the
distribution phase. During the accumulation phase, you can
contribute as much as you want and the earnings in the annuity grow
tax-deferred. During the distribution phase, you can elect to
receive a lump sum or you can annuitize. Annuitizing means you turn your
annuity into a stream of regular distribution checks for life or for a chosen certain
period of time. The security of knowing you'll get income for a specified
period, or for life, is one of the real advantages of annuitizing.
Distributions and withdrawals are generally taxed as income.
