1. WHAT TYPE OF GROUP RETIREMENT OPTIONS DO WE OFFER?
Group Unallocated Annuity's. This is an annuity contract or group annuity certificate that is not issued to the employee but is held by the employer, an entity, or a trust for the employee’s benefit. One of our major carriers - Life Insurance Company of the Southwest offers an unallocated group annuity in 3121 plans (a type of retirement plan) and other retirement group plans. These plans, according to the 1990 Omnibus Budget Reconciliation Act, can exercise their Social Security Section 218 exclusion allowance. They have the option of giving their part-time, temporary and seasonal employees a meaningful, defined contribution retirement plan as an alternative to Social Security. Fixed and fixed indexed annuities offered through National Life Group companies allow your employees to build retirement savings without downside risk!
2. CAN I EXCHANGE ONE ANNUITY FOR ANOTHER WITHOUT PAYING TAXES?
Yes you can. IRC Section 1035 allows for a tax-free exchange of one annuity for another. Before you decide to exchange one annuity for another, you will also want to consider any surrender charges that may be applied upon surrender of the contract as well as the ne surrender penalty schedule for the new annuity you plan to purchase.
3. IF I TAKE A WITHDRAW FROM MY NON-QUALIFED ANNUITY, HOW IS IT TAXED?
Withdrawals from annuities purchased after August 14, 1982, are taken from earnings first. You will be required to pay income taxes on all earnings taken from the contract. Once you have withdrawn earnings, withdrawals will be made from the premiums paid into the policy. Withdrawals of premium are not subject to income taxes. If you take withdrawals prior to age 59 ½, withdrawals that are made from the earnings in your contract may also be subject to a 10% premature distribution penalty. Withdrawals of premiums paid are not subject to the premature distribution penalty.
4. WON'T MY STATE PENSION BE ENOUGH TO RETIRE ON?
Chances are it will not. Many school district and governmental employees will experience a significant drop in income when they retire. Having supplemental retirement savings makes good financial sense.