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 Annuities 

An annuity is an additional way to diversify your investments while any growth on the investment and its earnings are tax deferred until withdrawals begin. They also offer the opportunity for lifetime payments and provide a guaranteed death benefit for your beneficiaries.

Annuities are backed by the issuing insurance company and all guarantees are backed by the claims paying ability of that insurance company. They are a contract between yourself (investor) and the issuing insurance company.

Though there are different types of annuities they all have a common thread as far as the benefits they offer investors. All of your earnings are tax-deferred, which means you don’t pay taxes on your earnings until you withdraw your money, usually at retirement. Amounts withdrawn prior to age 59 ½ are generally subject to 10% federal income tax penalty as well as ordinary income taxes.

There are typically two phases of annuities; the accumulation phase and the payout phase. During the saving and investing phase your assets are accumulated for potential growth. A fixed deferred annuity generally offers guarantee of principal and a guaranteed interest rate for a set period of time by the issuing insurance company. Variable deferred annuities offer greater growth potential and investment flexibility with a full range of stock and bond investment choices, but have a greater downside risk due to volatility of the underlying subaccounts.

The payout phase gives you several different options as to how to structure your income payment to complement your other retirement income sources. You can choose systematic withdrawals, taking income as you need it, or convert your annuity into a series of steady income payments, referred to as annuitizing your contract. You can elect to receive these payments for a set time period, or you can choose a guaranteed income for life, a feature only available in annuities.

There are many different types of annuities but they typically fall into four categories; fixed, equity indexed, variable, and immediate annuities.

Contact a Financial Consultant to learn more

Variable and fixed annuities are long-term, tax-deferred investment vehicles designed for retirement purposes; but the variable annuity contains both an investment and insurance component. Variable annuities are sold only by prospectus. Guarantees are based on claims paying ability of the issuer. Surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value.


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Securities and Insurance products offered through LPL Financial and its affiliates, Member FINRA / SIPC. International Bank of Commerce is not a registered broker dealer and is not affiliated with LPL Financial.

NOT A DEPOSIT | NOT FDIC-INSURED | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT GUARANTEED BY BANK | MAY LOSE VALUE

This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. registered representatives. LPL Financial Services’ U.S. registered representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.