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After-Tax Annuities

Prior to making the decision to contribute to an after-tax annuity, as an investor you should be contributing fully to your:

· 401-K,
· Keogh,
· tax-deferred retirement program, or
· Individual Retirement Account (IRA).
There is an immediate benefit to doing so, due to tax deductibility and tax deferral.

After-tax Variable Annuities
A variable annuity is not appropriate for an investor who needs liquidity of their funds. Persons with a limited amount of time or money would be better to invest in an investment vehicle where their money can be more easily accessed without the surrender charges, fees, and taxes that could be assessed when withdrawing money too soon.

Monies invested in a variable annuity should remain for a sufficient holding period of 10-years or longer, prior to distribution. Variable annuities are subject to market risks which causes their value to fluctuate.

One of the tax advantages of variable annuities is that tax-deferred compounding enables the investor's money to grow faster than it would in a taxable vehicle.

Upon distribution, an after-tax variable annuity is treated as ordinary income, whereas, after-tax mutual funds may be subject to capital gains tax treatment. Also, when funds are withdrawn before age 59 1/2, a 10% tax penalty may apply.

For those investors who are investing for retirement, who may be in a higher tax bracket now than they will be at retirement, a variable annuity may make sense to enable them to defer taxes now and pay at the lower tax bracket later.

Income and current tax rates need to be taken into consideration prior to the purchase of a variable annuity to evaluate the tax impact. The effect of tax rates must be viewed in relation to the length of time an investor intends to hold the investment.

There are risks associated with investing in variable annuities, including potential loss of principal value.

Should an after-tax variable annuity be the right choice for you, MEA Financial Services, Inc. through Paradigm Equities, Inc. has a selection of products available designed to fit most any need. For product information, including charges and expenses, contact us toll free at: 1-800-292-1950, and request a free prospectus. Please read the prospectus carefully prior to investing or sending money.

Variable annuities are subject to market risk which may cause value to fluctuate including loss of principal for variable accounts.

How Variable Annuities
and Mutual Funds Compare
Variable
Annuities
Mutual
Funds
Various vehicles to meet different investment objectives
The average variable annuity has 15 sub-accounts and multiple money managers.
YES YES
Provides professional management YES YES
Is regulated by the Securities Exchange Commission YES YES
A potential for a long-term hedge against inflation YES YES
Exposes the individual-to-market risk YES YES
Provides a guaranteed minimum death benefit
If the value of the annuity at the time of death is less that the invested capital, the insurance company will refund the difference, sometimes with interest.
YES NO
Various pay-out options, which includes the ability to receive lifetime income
When the retiring investor annuitizes, the money invested in the variable annuity is systematically returned as a guaranteed income stream that enjoys a preferential tax treatment-unlike taking a lump-sum distribution.
YES NO
Tax-deferred compounding of assets YES NO
Tax-free transferability from fund to fund or sub-account to sub-account
Many variable annuities automatically rebalance a portfolio or dollar-cost average into certain funds according to the investor's specifications. Unlike transfers among mutual funds, transfers among variable annuity sub-accounts are not taxable.
YES NO
Has available a fixed account with a guaranteed return
The fixed account option behaves like a guaranteed interest contract (or GIC) by offering a guaranteed fixed rate of return for a certain period of time.
YES NO
Avoids probate when passed onto a beneficiary YES NO
10% early withdrawal penalty before age 59 ½ YES NO

After-tax Fixed Annuities
With a fixed annuity the issuer guarantees your principal investment, and the income grows tax-deferred. Usually a minimum lump sum investment is made, however, some plans do allow additional deposits. Guarantees are subject to the claims paying ability of the underlying insurance companies.

What a fixed annuity can mean to you:

· safety of your investment, with the principal guaranteed by the issuer, (guarantees are subject to the claims paying ability of the underlying insurance companies),
· competitive current interest rates on a fixed interest account,
· special contract features, (i.e. some contracts allow you to withdraw a percentage each year without a contract withdrawal charge),however, withdrawals prior to 59 1/2 may be subject to a 10% IRS penalty.
· a wide range of pay out options. Some of which may be tax-favored, as a portion of the payments include return of your principal,
· tax deferral for individuals,
· avoidance of probate (generally) when a beneficiary is named.

Know what you are buying and what you should look for.

· Some fixed annuities may have a front-end acquisition fee, where others may not.
· Contract withdrawal charges are customary, either for a specified period or over the life of the contract. However, there are varying exceptions.
· Unless there is a qualified exception, a 10% tax penalty applies to withdrawals prior to age 59 1/2.
· Every company has their own policies, so be certain to review all documents carefully for charges, fees, and any rules regarding access to your funds.
· Be certain to know the company whose product you are considering before you buy. Know their investment strategies and financial track record.
· Make certain the product that you are purchasing fits your individual financial needs and expectations.

Companies represented by MEA Financial Services, Inc./Paradigm Equities, Inc. for after-tax annuities include:

·Lincoln National Life Insurance Company/American Legacy

·ING USA
DISCLOSURE For more complete information, including charges & expenses, obtain a prospectus from MEA Financial Services, Inc./Paradigm Equities, Inc. Read it carefully before you invest or send money.

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