An annuity is the only investment that guarantees income for life, no matter how long you live (or you and a spouse or partner live). It is a long-term contract with an insurance company that grows tax-deferred during the accumulation phase and then may make periodic lifetime payments to you in the distribution phase. Other insurance features offers beneficiary protection in the case of your death.
Tax-Advantaged Investing with Fewer Restrictions
Annuities offer significant tax advantages for long-term investing, if withdrawals are deferred until the owner is at least age 59 1/2. GEBA offers a range of annuities, the most well-known being:
- Non-Qualified Deferred Annuities, where an individual invests funds periodically over a number of years, usually to build a nest egg for retirement. These offer tax advantages similar to IRAs, but without the eligibility restrictions and contribution limitations found in IRAs. In a Deferred Fixed Annuity, the insurance company provider guarantees a minimum rate of return on your funds. In a Deferred Variable Annuity, you select from a number of investment options, and your returns are based on the earnings from the selected investments. GEBA offers the GEBA Max Fixed Annuity and provides Variable Annuities from multiple quality providers.
- Single Premium Immediate Annuities, in which a lump-sum amount of money is invested in return for a series of future payments many of which you cannot outlive, often for retirement income. There are a number of contract types and distribution options (fixed term, individual lifetime, joint and survivor lifetime, etc.).
Because of the complexities, GEBA's Insurance and Financial Consultants will explore your needs with you and tailor a specific product that is right for you.
Benefits of Investing in Deferred Annuities
A Deferred Annuity is called a qualified annuity when it is purchased as part of a qualified retirement plan like an IRA or 401(k). If purchased outside of a qualified retirement plan, it is called a non-qualified annuity. Either way:
- Interest and dividends accumulate in the account tax-deferred until withdrawn
- The IRS imposes tax penalties for normal withdrawals taken before age 59 ½
In addition, a non-qualified annuity offers greater flexibility than an IRA:
*Contact your tax professional for details
- There is no limit on the amount that can be contributed
- Contributions are not tax deductible, which means that at time of distribution, only the accumulated earnings on the account are taxed*
- There is no requirement to begin distributions at a certain age
Select from a Variety of Investment Options with a Variable Annuity
Variable Annuities offer all of the benefits shown above, plus the opportunity to earn market returns on your long-term investment. You can choose to invest in stocks, bonds, and a variety of fixed account options. Of course, earning market returns means your portfolio will be subject to investment risk and may at times lose value. But for members who are comfortable with a degree of risk, a Variable Annuity provides great investment flexibility.
GEBA’s licensed Insurance and Financial Consultants can help you select a Variable Annuity from among quality providers like Jackson National Life Insurance Company®, MetLife®, Lincoln Financial Group®, and Prudential Life Insurance Company. Let them tailor a Variable Annuity for you that fits your risk tolerance and investment preferences.
Earn Competitive Interest Rates with the GEBA Max Fixed Annuity
The GEBA MAX was designed specifically for GEBA to provide a competitive interest rate for its members.
Learn More About the GEBA MAX Fixed Annuity >
Take Advantage of Stable Returns and Professional Portfolio with the GEBA Stable Value Group Annuity.
The GEBA Stable Value Group Annuity is a non-qualified group annuity within the GEBA/GEMBA Supplemental Retirement Plan that uses the GEBA Stable Value Account as the primary investment vehicle.
Learn More About the GEBA Stable Value Group Annuity >
Group annuities and individual retirement accounts are offered through Government Employees' Mutual Benefit Association, Inc. (GEMBA).