Index Annuities

Index Annuities

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 retirement investment goals?

An index annuity may be suitable for people who:

  • Are looking for tax-deferred growth in their investment
  • Want a minimum interest rate guarantee but also like the idea of potentially being able to benefit from rising markets

Fixed index annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and earnings potential that is linked to participation in the growth, if any, of an index or benchmark. There are many types of index annuities and your financial professional can show you more specifically how an index annuity may be suitable for you.

What is your time horizon?

It’s important to remember that an annuity is for long term retirement investing. If you need money from your annuity in the early years of your contract, there may be a surrender charge (see the terms of your specific annuity contract) in addition to a 10% penalty tax if you take withdrawals before the age of 59½. All withdrawals reduce the death benefit and may reduce the value of any optional benefits. 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). See the prospectus for details. 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.

How and when would you like to begin withdrawing income from you annuity?

There are many income and withdrawal options with annuities. When you’re ready to start receiving income from your annuity, some of your options may be:

  • 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

Annuities may be a good choice for a portion of your retirement savings. Annuities can help you reach your retirement income goals with the choice and flexibility they can offer.

Learn more about annuity choices offered through one of the ING family of companies by visiting with your financial services professional. He/she can help you determine what type of annuity may be suitable 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 800-369-5303.

For Variable Annuities: Call 800-366-0066.

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