Fixed and Variable Annuities

An annuity is a contract between you and an insurance company. There are many different types and options with both fixed and variable annuities, however all annuities are meant to be long term, tax deferred investment vehicles designed to create an income stream for the annuitant.

Typically, the contract owner makes either a one-time lump sum payment or a series of payments to the insurance company. In return the insurance company agrees to make periodic payments to the contract owner over a specified period of time. For certain individuals an annuity may provide part of their retirement income, supplementing other sources such as IRA’s, social security or company pension plans.

For many people, a fixed or variable annuity may be an important part of their retirement income planning. Because of the complexity annuities present the advice and guidance of a First National Wealth Management Wealth Advisor can help you decide if this is an appropriate retirement strategy.

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*Fixed and Variable annuities are suitable for long-term investing, such as retirement investing.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.  Variable annuities are subject to market risk and may lose value