Obviously, one of the most attractive features of annuities is the potential tax-deferred growth that occurs during the accumulation phase. It should be noted, however, that when money is withdrawn or distributed, not on a regular basis, all or a portion would be taxed at ordinary income tax rates rather than as capital gains or dividends. This will be the case if you make systematic or periodic withdrawals, and a 10% penalty tax generally applies to withdrawals of earnings made before age 59½.
On the other hand, if you annuitize, only the portion of the money distributed that relates to earnings, as opposed to principal, will be taxable. In this instance, a portion of your income would be considered a "return of principal" and would not be taxable.
Investment return and principal value of an investment will fluctuate, and an investor's shares, when redeemed, may be more or less than their original cost.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC. Insurance products are offered through LPL or its licensed affiliates. Premier America Credit Union and Premier America Investment & Retirement Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Premier America Investment & Retirement Services, and may also be employees of Premier America Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Premier America Credit Union or Premier America Investment & Retirement Services. CA Insurance License #0759204, TX Insurance License#1643255.
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