Variable Annuities


What is a Variable Annuity?

A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.

A variable annuity offers a range of investment options. The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose. The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three.

Although variable annuities are typically invested in mutual funds, variable annuities differ from mutual funds in several important ways: First, variable annuities let you receive periodic payments for the rest of your life (or the life of your spouse or any other person you designate). This feature offers protection against the possibility that, after you retire, you will outlive your assets.

Second, variable annuities have a death benefit. If you die before the insurer has started making payments to you, your beneficiary is guaranteed to receive a specified amount – typically at least the amount of your purchase payments. Your beneficiary will get a benefit from this feature if, at the time of your death, your account value is less than the guaranteed amount.

Third, variable annuities are tax-deferred. That means you pay no taxes on the income and investment gains from your annuity until you withdraw your money. You may also transfer your money from one investment option to another within a variable annuity without paying tax at the time of the transfer. When you take your money out of a variable annuity, however, you will be taxed on the earnings at ordinary income tax rates rather than lower capital gains rates. In general, the benefits of tax deferral will outweigh the costs of a variable annuity only if you hold it as a long-term investment to meet retirement and other long-range goals.


CAUTION!


Other investment vehicles, such as IRAs and employer-sponsored 401(k) plans, also may provide you with tax-deferred growth and other tax advantages. For most investors, it will be advantageous to make the maximum allowable contributions to IRAs and 401(k) plans before investing in a variable annuity.

In addition, if you are investing in a variable annuity through a tax-advantaged retirement plan (such as a 401(k) plan or IRA), you will get no additional tax advantage from the variable annuity. Under these circumstances, consider buying a variable annuity only if it makes sense because of the annuity's other features, such as lifetime income payments and death benefit protection. The tax rules that apply to variable annuities can be complicated – before investing, you may want to consult a tax adviser about the tax consequences to you of investing in a variable annuity.



Remember: Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals. Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early. Variable annuities also involve investment risks, just as mutual funds do.

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Specific products and investment choices can only be made after a customized suitability review has been performed.



Variable Annuities are long-term investment alternatives designed for retirement purposes. Withrdrawals of taxable amounts are subject to income tax, and if taken prior to age 59 and 1/2, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Partial withdrawals may also reduce benefits available under the contract as well as the amount available upon a full surrender. An investment in the securities underlying variable annuities involves investment risk, including possible loss of principle. Your contract, when redeemed, may be worth more or less than the total amount invested. Past performance is no guarantee of future results.

You should consider your investment objectives before investing into any product. Consider the risks, charges and expenses of the variable annuity and its underlying investment options carefully before investing. Price volatility, liquidity and other risks accompany an investment into variable annuities. The prospectuses for the variable annuity contain this and other information. This information should be reviewed prior to investing. You may obtain a free prospectus by calling your financial professional.

Information an/or opinions on any website other than that of www.themeckgroup.com do not necessarily represent the views or opinions of The Meckenstock Group, IFG or its staff and advisors. An individual should contact a financial professional or other trusted advisors before making any investment decisions.

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Investment Advisory Representatives offering advisory services through Main Street Advisors, LLC, a registered investment adviser. Securities and additional advisory services offered through Independent Financial Group, LLC (IFG), a registered broker dealer and a registered investment adviser. Member FINRA/SIPC. All of the entities mentioned above are unaffiliated. Licensed to sell securities in the following states: AR, AZ, CA, CO, CT, FL, GA, IA, ID, IL, IN, KS, MA, MD, MI, MN, MO, NC, NE, NV, NY, OH, OK, OR, PA, SD, TN, TX, UT, VA, WA, WI, & WY. The information provided herein has been obtained from sources believed to be reliable however we cannot guarantee or represent that it is accurate, complete or current. Because situations vary, any information provided on this site is not intended to indicate suitability for any particular investor. Hyperlinks are provided as a courtesy and should not be deemed an endorsement. When you link to a third party website you are leaving our site and assume total responsibility for your use or activity on the third party sites.

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