Fixed Annuities

Whether you've already retired or are approaching retirement, you have a lot of choices when it comes to how you’ll create and draw your retirement income.

As you make decisions about how you’ll fund your retirement, you must first consider a few key questions:

What are your short-term and long-term goals?

A fixed annuity is great for people who:

• Are looking for tax-deferred growth
• Want a fixed rate of return so they know exactly what their money is earning.
• Want minimum guarantees not available in other financial vehicles.

A fixed annuity is a policy that you can purchase, and in turn we will pay you a fixed, stated rate of return. The interest rate is guaranteed for a certain period of time, such as a contract year, and then the rate may change. You will be notified of what your new rate will be and then that rate is locked in for another period of time, for example, another contract year.

There’s also a “minimum” guarantee rate so you know that your money will always earn a certain amount no matter how low interest rates fall. All guarantees are subject to the claims paying ability of the issuing insurance company.

While your money is in the annuity the interest credited to the contract grows tax-deferred, meaning you will not pay any taxes on the growth of your money until you decide to make a withdrawal.

Because you’re not paying any taxes on those earnings, your money actually grows faster because the money that would have gone to the IRS gets to stay in the annuity and continue to compound.

Access to your money

It’s important to remember that an annuity is for long term investing. If you need money from your annuity in the early years of your contract, there may be a surrender charge if the amount you need is more than the free withdrawal amount you’re allowed to take each year, usually 10%. (IRS will also look for his income tax on earnings that you take out as well.)

Because the IRS is letting your money grow tax-deferred, they want to make sure that you are in it for the long haul, too. Early withdrawals and other distributions of taxable amounts may be subject to ordinary income tax, a surrender charge, and if taken prior to age 59½, an IRS 10% premature distribution penalty tax may apply. Withdrawals from fixed annuities also may be subject to a Market Value Adjustment (MVA). There may be exceptions to this rule that your financial professional can tell you about, but in general, you should plan to keep your money in past that birthday.

There’s also a silver lining if you’re saving for retirement. If you’re familiar with IRAs, you may know that you have to start taking money out of your IRA when you turn 70½ even if you don’t need the income. Well, as long as your annuity is not in an IRA, you don’t have to take that money until you’re darn good and ready to. (If you buy an annuity with a stated maturity date or age, such as age 100, you would have to take it then.)

IRAs and other qualified plans already provide tax deferral like that provided by an annuity. Additional features and benefits, such as contract guarantees, death benefits and the ability to receive lifetime income are contained within the annuity for a cost. Please be sure the features other than tax deferral and costs of the annuity are right for you when considering the purchase of an annuity for IRAs and other qualified plans.

How do you take income from your annuity?

There are almost as many income and withdrawal options on annuities as there are types of annuities. Please see the prospectus or contract disclosure for additional costs.

When you’re ready to start taking income and spend your annuity, you can:

• Take random “lump sum” withdrawals any time you want
• Set up a systematic withdrawal program. You tell us how much you want and how often, when to start and when to stop. This gives you the most flexibility, but you could outlive your money if you spend too much too fast.
• Annuitize the contract to set up a guaranteed income stream. This is the option where we will guarantee your income for you, regardless of how long you live, even if you make it to 120.

If you die while your annuity contract is in force, and you have named a beneficiary, the full value of your fixed annuity can generally pass to your heirs without the cost and delay of probate. If you've already annuitized your contract for a guaranteed income stream, the income option you chose will determine how much money may go to your heirs.

Let’s Recap

Depending on your answers to these and other important questions, annuities may be a good choice for a portion of your retirement savings. Annuities can help you reach your retirement-planning goals with the choice, control, and flexibility they offer.

Annuities offered through the ING family of companies can provide you:

CHOICE

Depending on the type of annuity and your risk tolerance, you can choose how your money earns interest.

CONTROL

Annuities allow you to choose your retirement income. You decide how much guaranteed income you want – and when you want it.

FLEXIBILITY

ING family of companies offers innovative living benefits, death benefits, income options, and contract guarantees. You have the flexibility to choose the annuity options that are right for you.

Learn more about annuity choices offered through the ING family of companies by visiting with your financial services professional. He/she can help you determine what type of annuity may be right for a portion of your retirement savings.

Need help with an ING Family of Companies' Annuity or claim request?

For Fixed, Index & Immediate Annuities: Call 262-290-5210.

Annuities are issued by ING USA Annuity and Life Insurance Company (Des Moines, IA), and ING Life Insurance and Annuity Company (“ILIAC”, Windsor, CT). Registered fixed annuities are distributed by Directed Services LLC. All are members of the ING U.S. family of companies.