Jackson National Immediate Annuity Review
Immediate annuities are long-term, tax-deferred vehicles designed for retirement. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½.
Why a Jackson immediate annuity?
Pensions and Social Security used to be the main funding for retirement. Today, however, people have to rely more on their personal assets to fund retirement while ensuring that their income lasts as long as they do. An immediate annuity from Jackson is a financial vehicle that can provide a variety of appealing benefits which can be tailored to fit your particular retirement needs.
Valuable features include:
1. Dependable and predictable income options, including lifetime income
2. Protection against market swings and interest rate volatility so the income you receive is not affected
3. Protection against inflation with an optional Income Escalator Payment options (subject to a $50 minimum payment unless direct-deposited) include monthly, quarterly, semiannually and annually. Income payments received may be based on the amount you contribute, your age, gender and/or other factors. Once established, your income is steady and taxed only as you receive payments. Because a portion of your payment is considered a return of principal, only earnings are taxed on nonqualified contracts.
Income Options:
1. Lifetime Income – Choose to receive payments for the rest of your life with no refund or with an optional cash or installment refund. A refund option guarantees that every dollar of net premium paid into your annuity will be paid to you or your beneficiary.
2. Period Certain – Choose any period from five to 60 years to receive your payments, subject to availability and issue age. If you pass away during the period, your beneficiary(ies) will receive the payments during the remaining years of the selected period.
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3. Life with Period Certain – This income option will guarantee lifetime payments to you for as long as you live. If you pass away before the end of the period selected, your beneficiary(ies) will receive payments for the remainder of the period certain. If the joint option is elected, you can choose to have the survivor receive the same amount, two-thirds or half of the original payment.
Fees:
A one-time fee of $250 is collected on a minimal initial premium payment of $5,000 on qualified and nonqualified plans.1 However, this fee is waived on premiums of $15,000 or more. State premium taxes will be deducted where applicable.
Meeting Your Income Needs
Protection Against Inflation
Traditional immediate annuity payments stay level for the duration of the chosen term. Although level payments may provide for a higher initial payment, they are not designed to keep pace with inflation. The Income Escalator option guarantees that the immediate annuity payments you receive will increase by 3% every year. This protection is designed to help keep pace with inflation’s historical average.
The Income Escalator is available with the Life Annuity with No Refund, Period Certain Annuity and Life Annuity with Period Certain income options. In contrast to the more typical equal payments provided under these income options, the Income Escalator allows you to choose to receive lower initial income payments that increase annually for a number of years and eventually become higher than the level income payments in later years. As a result, depending on how long you live, you may receive less money by choosing the Income Escalator.
Getting Started With An Immediate Annuity
Together with your representative, you can use this guide to determine if there’s a gap between your income needs and the sources of guaranteed income you could use to fund those needs.
Once you’ve determined if you have a gap, you and your representative can discuss if covering all or a part of that gap with income payments from an immediate annuity is right for you.
When planning for retirement, think of your income needs as part of a pyramid. Your necessary, daily expenses make up the base of the pyramid. You’ll want to start with these expenses before potentially including expenses in the next levels of discretionary or even extra income.
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