Fixed Annuity Fits Member’s Retirement Planning Needs
If you are looking for the next thrill in life, here’s a tip: Including one in your retirement planning might not be the best option. For many people, taking the opposite path — including guarding against putting all your eggs in one basket — is a more appropriate choice.
U.S. News & World Report outlines this type of retirement planning, suggesting that funding your retirement with different sources can help keep you from outliving your money. Should one source falter, having money available in others helps protect your finances.
One source to consider as a funding vehicle for retirement is an annuity.
For WoodmenLife member1 Deral “Butch” Venable of Gallatin, TN, that meant looking into a fixed annuity offered by WoodmenLife. That’s because he’s not a thrill-seeker when it comes to his money. Where others might enjoy the excitement of the stock market roller coaster, Venable appreciated how WoodmenLife’s deferred fixed annuity receives a guaranteed minimum interest rate and how the money growing inside the annuity isn’t taxed until it’s taken out.
“First of all,” he said, “I never thought I’d have any money, and I didn’t want to squander it.”
What Is an Annuity?
Annuities are insurance contracts that are set up so you can grow your retirement savings and provide a guaranteed income. You can make regular premium payments or a single payment, and in turn you receive regular payments over time.
No two people’s situations are the same. For that reason, there are several types of annuities to provide different solutions for everyone’s unique needs. WoodmenLife offers three types of annuities:
- Deferred fixed annuities, like the one Venable chose, offer a minimum guaranteed interest rate, and earnings aren’t taxable until you receive distributions
- Variable annuities2 can generate higher returns but may be riskier because growth depends on multiple factors, including the performance of the stock market
- Immediate annuities start generating income payments right away for a designated period, except the Life Income Annuity option, which generates payments for a lifetime
Partnering For Retirement Planning
A lengthy career as a certified pressure welder allowed the 68-year-old Venable to build himself a nest egg — he earned a pension, and both he and his wife, Barbara, collect Social Security benefits. One day, he was talking about retirement planning with his accountant, who pointed him toward WoodmenLife Financial Representative Tony Snider of Cottontown, TN.
Snider uses the thrill-ride analogy when discussing Venable’s approach to saving money.
“It’s the conservative approach versus the aggressive approach,” Snider said. “If you don’t want the thrill of a roller-coaster ride in the market, then a fixed annuity may be better for you.”
Venable understood the difference and saw the opportunities being aggressive could bring. In the end, though, he wanted the stable growth a fixed annuity could provide.
“The roller coaster is a ride that you decide to get on and you can’t control,” he said. “That’s the mindset you have to have, whether you have $2 million or $2.
“What you can control is surveying your options, so you find the best fit for you.”
After Venable took his pension in retirement, Snider helped put some of his assets into a fixed annuity. Venable has been pleased with their incremental growth, knowing he has an income stream he can count on.
Fixed Annuities for Retirement Planning
For Venable and others with similar thoughts about retirement planning, there are five reasons why a fixed annuity makes sense:
- Defer taxes — Build earnings in the annuity that are not taxable until you begin receiving payments, at a time when you may be in a lower tax bracket3
- Keep adding money — Continue contributing even after you’ve retired4
- Leave money for your loved ones — Leave the annuity value to a beneficiary you choose5
- Count on a minimum guaranteed interest rate — No matter what the current interest rate is, WoodmenLife’s fixed annuities will never earn less than the minimum guaranteed rate
- Access funds conveniently — Withdraw up to 10% of your annuity value each certificate year without paying a surrender charge6
Stability, Stability, Stability
Even though current economic times have seen interest rates rise for fixed annuities, it’s still the guaranteed minimum rate that Venable appreciates. He values dependability. In fact, Snider said, it’s what led Venable to do business with WoodmenLife.
“He liked our stability and our reliability,” Snider said. “And he liked our solid 130-plus year reputation and that we make good on our promises. Then, you put the WoodmenLife Extras7 on top of that — it’s a no-brainer.”
Venable embraced WoodmenLife’s shared commitment to family, community and country right away and wishes he could do more. Snider calls him naturally generous, saying Venable would give anyone the “shirt off his back.”
Venable chuckled, calling it his “positive attitude” that he “bestows on others, whether they like it or not.”
Visit WoodmenLife.org or talk to a Representative to learn more about annuities and retirement planning with WoodmenLife and WoodmenLife Financial Services.
WoodmenLife, its employees and Representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Taxable distributions (and certain deemed distributions) are subject to ordinary income tax and, if made prior to age 59 1/2, may also be subject to a 10% federal income tax penalty. Early surrender charges may also apply. Contact your professional tax advisor for more information.
All products may not be available in all states.
Not all Representatives are licensed to sell all products.
Not FDIC- or NCUSIF-insured. May lose value. Not insured by any federal government agency. Not a deposit. Subject to claims-paying ability.
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An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product.
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Securities are offered through Woodmen Financial Services, Inc. (WFS), 1700 Farnam Street, Omaha, NE 68102, 877-664-3332, member FINRA/SIPC, a wholly owned subsidiary of Woodmen of the World Life Insurance Society (collectively “WoodmenLife”). Securities other than the WoodmenLife Variable Annuity are issued by companies that are not affiliated with WoodmenLife. This material is intended for general use with the public. WFS is not providing investment advice for any individual or any individual situation, and you should not look to this material for any investment advice. WFS has financial interests that are served by the sale of these products or services.
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Withdrawals of earnings are taxed as ordinary income.
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The maximum amount of premium that may be paid in the first calendar year is the initial premium plus $25,000. The maximum amount of premium that may be paid in any other calendar year is $25,000. Applies only to Flexible Premium Deferred Annuities.
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Amount received is generally taxable to beneficiaries as ordinary income.
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Each certificate year, you can withdraw up to 10 percent of your annuity value without paying a surrender charge. Total withdrawals exceeding 10 percent of the annuity value as of the first withdrawal in each certificate year, may be subject to a surrender charge. After you attain age 73, minimum distributions required by the IRS exceeding 10 percent of your annuity value can be withdrawn without paying a surrender charge. If you are under age 59 1/2 at the time of any withdrawal, a 10 percent IRS penalty may apply.
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WoodmenLife Extras are available to members. An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product. These extras are not contractual, are subject to change and have specific eligibility requirements, such as length of membership, number of qualifying members in household and/or qualifying event.
7962-XX-0707; 7962-02-0905 Single Premium Deferred Annuity
7964-XX-0707; 7964-02-0905 Flexible Premium Deferred Annuity
456-XX-0208, 456-44-0301, 456-12-0302, 456-19-1207 Variable Annuity
85-XX-0212, 85-XX-1510 Single Premium Immediate Annuity
90-XX-0212 Single Premium Immediate Annuity
91-XX-0212 Single Premium Immediate Annuity
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