The non-qualified annuity stretch feature is a little-known strategy that may help defer taxes and preserve your wealth for your beneficiaries, as well as successor beneficiaries.
With a non-qualified annuity (purchased with after-tax dollars), beneficiaries commonly elect a lump-sum distribution or use the default Five-Year Rule. Income from the gains within the contract (in the form of interest, interest credits or returns from underlying investments) could place them into a higher tax bracket.
With our deferred, non-qualified annuities, primary beneficiaries can choose to stretch distributions over his/her lifetime. By stretching payments over their lifetime, the taxable income is less likely to push the beneficiary into a higher tax bracket. Additionally, this tax-efficient approach allows the beneficiary enjoy tax-deferred accumulation as well as extend the stretch benefits to their successor beneficiaries.
As with the default Five-Year Rule, the beneficiary retains full access to the contract value and can withdraw funds as they wish.
The stretch feature is available on our inherited fixed annuities*, variable annuities and select fixed index annuities* not held in an IRA or other qualified retirement accounts, and where a guaranteed lifetime income rider has not been elected.
*Fixed and Fixed Index Annuities not available in the state of New York. The stretch features is available on inherited annuities not held in an IRA or other qualified retirement accounts, and where a guaranteed lifetime income rider has not been elected.
Neither Security Benefit Life Insurance Company nor Security Distributors is a fiduciary and the information provided is not intended to be investment advice. For additional information, including any specific advice or recommendations, please visit with your financial professional.
Investing in variable annuities involves risk and there is no guarantee of investment results.
Annuities are issued by Security Benefit Life Insurance Company (SBL) in all states except New York. SBL is not licensed in and does not transact business in New York.
Services and securities are offered through Security Distributors, a subsidiary of SBL. SBL is a subsidiary of Security Benefit Corporation (Security Benefit).
Variable Annuities are long-term investments suitable for retirement investing. Product features, limitations, and availability vary by state.