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Business Annuities

Annuities
An annuity is an investment structure that allows one or more large deposits to be converted into a stream of income. Annuities can serve as a mechanism for a business owner to fund qualified retirement accounts for employees.

Are annuities right for my business? Here are the facts:

  • Annuities can offer significant tax benefits, as they allow employers (and in some cases employees) to make tax-deferred contributions to individual retirement accounts.
  • An annuity goes through two phases:
    • The first phase is an accumulation phase in which money is contributed to the fund and the value of the annuity increases.
    • The second phase the income phase. The annuity will begin to pay a guaranteed stream of income to the policy owner, or beneficiary in the case of the passing of the insured. This income may last for the life of the beneficiary or for a predetermined period of time.
  • An annuity can be used by an employer to fund a savings incentive match plan (SIMPLE IRA) or a simplified employee pension plan (SEP-IRA).
    • A SIMPLE IRA offers employees the opportunity to contribute to an individual retirement account set up in their name. The employer is required to make annual contributions for each of the plan's participants. Employee and employer contributions both enjoy significant tax benefits.
    • A SEP-IRA also offers employers the ability to make tax-deductible contributions, but does not allow employees to make their own contributions.


Annuities can be a highly advantageous way to set up retirement accounts for your employees. Give us your name and number, and we can help you figure out if an annuity would be beneficial to your organization.

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