Monday, February 23, 2004
Recent client question? www.legacyannuities.com
Joe
What is a "Split Annuity"?What are the benefits?
Split Annuities
Income and Capital Preservation
A Split Annuity is not an annuity policy but a combination of two annuity products. A single premium immediate annuity and a single premium tax deferred annuity. Structured in such away as to produce immediate income for a guaranteed period of time and to restore you original principal at the end of that time period.
Administration
A Single Premium Annuity is used to restore the original principal at the end of the guaranteed period. The Single Premium Immediate Annuity provides a guaranteed monthly income for the same time period.
Advantages of a Split Annuity
One advantage of a split annuity is that your original principal is restored at the end of the guaranteed period. This allows you to start the process over again at prevailing interest rates. The funds placed in the Single Premium Deferred Annuity policy are available for emergencies with limitations.
Plan Limitations
The limits place on the use of a split are annuity are the issue ages of the policies, usually age 0-85 for non qualified funds and 0-70 for qualified funds. The immediate income periods range from 3 to 20 years.
Example of a Split Annuity
$100,000
Immediate Annuity
$38,430
at 6.2% Deferred Annuity
$61,570
at 6.25%
Monthly Income
$485.37 will grow
to
Annual Income
$5,824.48 Yr. 1 $65,418
Yr. 2 $69,507
for 8 years
for which Yr. 3 $73,851
Yr. 4 $78,466
82%
is not taxed Yr. 5 $83,371
Yr. 6 $88,581
Total Income
before Taxes
$46,595.83 Yr. 7 $94,118
Yr. 8 $100,000
Original Principal
Please note that the illustration is based on a guaranteed interest rate of 6.25% for 8 years. Withdrawals from an annuity prior to age 59 1/2 may result in a 10% penalty tax imposed by the IRS. Annuities are not FDIC insured.
Thanks,
Joe
www.legacyannuities.com
Joe
What is a "Split Annuity"?What are the benefits?
Split Annuities
Income and Capital Preservation
A Split Annuity is not an annuity policy but a combination of two annuity products. A single premium immediate annuity and a single premium tax deferred annuity. Structured in such away as to produce immediate income for a guaranteed period of time and to restore you original principal at the end of that time period.
Administration
A Single Premium Annuity is used to restore the original principal at the end of the guaranteed period. The Single Premium Immediate Annuity provides a guaranteed monthly income for the same time period.
Advantages of a Split Annuity
One advantage of a split annuity is that your original principal is restored at the end of the guaranteed period. This allows you to start the process over again at prevailing interest rates. The funds placed in the Single Premium Deferred Annuity policy are available for emergencies with limitations.
Plan Limitations
The limits place on the use of a split are annuity are the issue ages of the policies, usually age 0-85 for non qualified funds and 0-70 for qualified funds. The immediate income periods range from 3 to 20 years.
Example of a Split Annuity
$100,000
Immediate Annuity
$38,430
at 6.2% Deferred Annuity
$61,570
at 6.25%
Monthly Income
$485.37 will grow
to
Annual Income
$5,824.48 Yr. 1 $65,418
Yr. 2 $69,507
for 8 years
for which Yr. 3 $73,851
Yr. 4 $78,466
82%
is not taxed Yr. 5 $83,371
Yr. 6 $88,581
Total Income
before Taxes
$46,595.83 Yr. 7 $94,118
Yr. 8 $100,000
Original Principal
Please note that the illustration is based on a guaranteed interest rate of 6.25% for 8 years. Withdrawals from an annuity prior to age 59 1/2 may result in a 10% penalty tax imposed by the IRS. Annuities are not FDIC insured.
Thanks,
Joe
www.legacyannuities.com
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