Annuities

Although annuities are a popular way to invest for retirement, many people still don't know much about them.1 An annuity is essentially a contract issued by an insurance company which allows you to accumulate money on a tax-deferred basis for long-term goals such as retirement. When you are ready to receive income from your annuity, you can withdraw funds as needed, or set up a regular payment schedule guaranteed by the issuer, which lasts for a specified period.2

There are two types of annuities:

  • A fixed annuity has a guaranteed fixed interest rate for a stated period. Depending on the terms of the contract, the insurance company may adjust the rate annually. There are two types of fixed annuities. In the first type, the insurance company guarantees the interest rate for a specified period, typically one to 10 years. The second type guarantees a bonus rate for one year, then resets the rates each year according to current interest rates.
  • A variable annuity is basically a basket of investment options-generally referred to as sub-accounts-issued by an insurance company. Any earnings within a variable annuity are permitted to accumulate tax-deferred. You pay no taxes on earnings until you begin taking withdrawals, usually during retirement. There are no annual contribution limits for a variable annuity. The sub-accounts vary according to the securities they invest in and their risk level. Return on an investment in a variable annuity depends on the performance of the sub-accounts you choose.

A Wachovia Securities Financial Advisor can help you determine how annuities may fit into your overall investment plan.

Variable annuities are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling a Wachovia Securities Financial Advisor. Read it carefully before you invest. Variable annuities are long-term investments suitable for retirement funding and are subject to market fluctuations and investment risk.

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1 Insurance products are offered through non-bank insurance agency affiliates of Wachovia Securities and are underwritten unaffiliated insurance companies.

2 Withdrawals from an annuity before age 59 1/2 may incur a 10% tax penalty. Withdrawals may be subject to surrender charges and reduce death benefit and contract value. Guarantees are based on the claims-paying ability of the issuing insurance company.

Securities and Insurance Products: Not Insured by FDIC or any Federal Government Agency; May Lose Value; Not a Deposit of or Guaranteed by a Bank or any Bank Affiliate

Wachovia Securities is the trade name used by three separate, registered broker-dealers and nonbank affiliates of Wachovia Corporation. Retail securities brokerage services offered through Wachovia Securities, LLC, Member NYSE/SIPC and Wachovia Securities Financial Network, LLC, Member FINRA/SIPC. Corporate and Investment Banking services offered through Wachovia Capital Markets, LLC, Member NYSE, FINRA, and SIPC. A.G. Edwards is a division of Wachovia Securities, Member SIPC.