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 It should be noted, however, that when money is withdrawn or distributed, not on a regular basis, all or a portion would be taxed at ordinary income tax rates rather than as capital gains or dividends.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.
Investment and certain insurance products offered through INFINEX INVESTMENTS, INC. Member of FINRA/SIPC. Rhinebeck Asset Management is a division of Rhinebeck Bank. Infinex and Rhinebeck Bank are not affiliated.
NOT A DEPOSIT | NOT FDIC INSURED | NOT GUARANTEED BY THE BANK |
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | MAY GO DOWN IN VALUE |
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