Annuities
Many people have made annuities part of their retirement plan — for good reason. While you cannot predict market performance, inflation, future life events or how long you'll live, annuities can help take these retirement risks out of the equation by providing guarantees that protect your retirement income needs.
All guarantees are based on the continued claims paying ability of the issuing company and, on variable annuities, do not apply to the performance of the variable subaccounts, which will vary with market conditions.
How annuities work
Simply put, an annuity is a contract between you and an insurance company. You pay the insurance company one or more purchase payments. In exchange, you'll have access to convenient retirement income payout features and optional benefits (at additional cost), depending on the type of annuity.
Annuities are unique because of their combination of tax deferral and the opportunity for a guaranteed stream of income payments.
Fixed and variable annuities
There are two types of annuities — fixed and variable. The main difference is based on how the purchase payments are allocated. A financial advisor who is familiar with your financial goals, objectives and risk tolerance can help you determine which type of annuity might be right for you.
| Fixed annuities offer | Variable annuities offer |
|---|---|
Guaranteed rate of return. The insurance company guarantees a minimum interest rate that you will receive, based on the annuity you purchase. Security. Fixed annuities guarantee principal and a minimum interest rate, adjusted for any withdrawals. Flexible income options. Choose from a lump-sum payment, or equal payments over a period you select, including the rest of your life. |
Growth potential. A variable annuity's value may go up and down based on its investments, which can range from conservative to aggressive. Diversification. You choose from a variety of investment options and enjoy tax-free transfers between investments. Flexible income options. Choose a fixed or variable stream of income in addition to lump-sum or equal payments over a period you select. |
RiverSource® Annuities
Ameriprise Financial offers a range of annuity products issued by RiverSource Life Insurance Company and, in New York, by RiverSource Life Insurance Co. of New York. These products offer unique combinations of features and benefits to help you in both stages of retirement — accumulating assets and taking income.
Performance of RiverSource Annuities
You should consider the investment objectives, risks, charges and expenses of the variable annuity and its underlying investment options carefully before investing. For a free copy of the annuity's and underlying investment's prospectus, which contains this and other information about variable annuities, call 1 (800) 437- 4332. Read the prospectus carefully before you invest.
Before you purchase, be sure to ask your financial professional about the annuity's features, benefits, risks and fees, and whether the annuity is appropriate for you, based on your financial situation and objectives. Variable annuities are complex investment vehicles that are subject to market risk, including the potential loss of principal invested. Annuities are long-term insurance products.
Withdrawals that do not qualify for a waiver may be subject to a withdrawal charge. Withdrawals are subject to income taxes and withdrawals before age 59-1/2 may incur an IRS 10% early withdrawal penalty.
There is no guarantee that the annuity will keep up with inflation.
Ameriprise Financial Services, Inc. offers financial advisory services, investments, insurance and annuity products. RiverSource® products are offered by affiliates of Ameriprise Financial Services, Inc., Member FINRA and SIPC. CA License #0684538.
Most annuities have a tax-deferred feature. So do many retirement plans under the Internal Revenue code. As a result, when you use an annuity to fund a retirement plan that is tax-deferred, your annuity will not provide any necessary or additional deferral for that retirement plan. But annuities do have features other than tax deferral that may help you reach your retirement goals. You should consult your tax advisor prior to making a purchase for an explanation of the tax implications to you.
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