Fixed Income Annuities and Variable Rate Annuities
Looking for income in retirement? An annuity may be right for you.
Acquiring sufficient retirement income can be a challenge today as few employers offer a guaranteed pension plan. Many people question the reliability of Social Security and wonder how the benefit of a longer life expectancy will affect how long their retirement savings will last. With these questions top of mind, many investors are including annuities in their portfolio.
What is an annuity?1
An annuity is a contract between an individual and an insurance company, and can be either fixed or variable:
- With fixed income annuities, offered by Fifth Third Insurance, your principal balance is safe because the insurance company assumes the investment risk, and is guaranteed1 to earn a fixed rate of interest for a fixed rate of time, usually from one to five years, or
- Variable annuities2 do not guarantee a rate of return and can carry a higher degree of risk because they may invest in stocks, bonds or money market securities.
Guarantees are based on the claims-paying ability of the issuer.
Overall, annuity features and benefits can include a combination of the following:
|Lifetime Income||You can choose to receive income from your annuity for life, and can set the payout to cover your spouse's lifetime as well|
|Tax-Deferred Growth3||Your money may grow faster than if in a taxable investment due to tax-deferred compounding, because your principal, interest and tax savings all earn interest|
|Penalty-free Withdrawals||Some annuities permit tax-free withdrawals for healthcare costs and other hardships or emergencies|
|Probate Avoidance||The annuity contract names a beneficiary and, therefore, usually allows the annuity to go directly to the beneficiary, avoiding probate|
|Death Benefits||Some variable annuities provide a guaranteed death benefit. Some fixed annuities guarantee payment of the current contract value to the beneficiary at the time of death|
- Annuities are long-term investment vehicles designed for retirement purposes. An annuity can be either a fixed or variable contract between an individual and an insurance company that puts savings to work for you over the long-term with tax-deferred earnings. Withdrawals of taxable amounts are subject to income tax, and if taken prior to age 59 1/2 a 10% federal tax penalty may apply.
- Offered through Fifth Third Securities.
Variable annuities are sold by prospectuses, which contain more complete information including fees, contingent deferred sales charges and other costs that may apply.
Variable annuities are subject to certain insurance related charges including, but not limited to, mortality and expense charges, and administrative fees.
As with any investment, investing in variable portfolios involves risk, including possible loss of principal. Past performance is no guarantee of future results.
An investor should consider the underlying variable portfolio's investment objective, risks, sales charges, expenses, and ongoing fees carefully before investing or sending money. This and other important information about the underlying variable portfolios can be found in the fund's prospectus. To obtain a prospectus, please call 1-888-889-1025. Please read the prospectus carefully before investing.
Variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Upon retirement, variable annuities may pay out an income stream of a series of payments or a lump sum. Whether you die during the accumulation or payout phase, your beneficiary may be eligible to receive any remaining contract value.
- Fifth Third Securities does not provide tax advice. Please consult your tax advisor before making any decisions or taking any action based on this information.
Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a wholly owned subsidiary of Fifth Third Bank, a registered broker-dealer, and a registered investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Securities and investments offered through Fifth Third Securities, Inc. and insurance products:
|Are Not FDIC Insured||Offer No Bank Guarantee||May Lose Value|
|Are Not Insured by any Federal Government Agency||Are Not A Deposit|
Insurance products made available through Fifth Third Insurance Agency, Inc.
Investments, variable annuities and brokerage accounts are offered through Fifth Third Securities, a wholly owned subsidiary of Fifth Third Bank. Fixed annuities are offered through Fifth Third Insurance Agency Inc., a wholly-owned subsidiary of Fifth Third Bank.