A Great Way To Get Income On A Monthly Basis
Okay, let's say you've let your Variable Annuity grow for a number of years
and you're now ready to start receiving income. Great!
Traditionally, there have only been two ways to receive your money: 1)
withdraw a lump sum or 2) annuitize. Withdrawing a lump sum means getting
hit with a pretty significant tax bill in one tax year. Annuitizing is an
irrevocable decision to receive annuity payments for a specific period of time.
Both options have their benefits. Here's an alternative that most
insurance agents don't tell you about because either they don't know about it or
their plans don't' offer it. It's called Systematic Withdrawal.
Systematic Withdrawal allows you to determine how much and when you receive
income and allows you to increase or decrease the amount as often as you
like. It's a way for you to meet your income needs, whether
it's current living expenses, a vacation, care for a loved one, a child's
education or whatever, while keeping the balance of your sub-accounts growing
tax-deferred, in your control and with the benefit of professional money management.
And best of all, it is not an irrevocable income choice as with annuitizing.
Systematic Withdrawal gives you complete control over your investment
income and over the taxes you pay*. You can choose the amount and frequency of withdrawals - monthly,
quarterly, annually. And it's easy! With some plans you even have
the option of automatic deposits to your bank account. Of course, you'll
want to make sure that the plan you're buying has this feature. I'll bet
this becomes very helpful to you someday.
* Earnings taken from a variable annuity are
taxed as ordinary income.
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