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Stages of Annuity Investments California

A look at the different stages and life cycle of an annuity investment.

Local Companies

Bankers Life and Casualty
661-946-3903
950 E Palmdale Blvd
Palmdale, CA

Etech Securities Inc.
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3600 Wilshire Blvd
West Hollywood, CA

Altman Ian
(415) 395-9300
100 Pine St
San Francisco, CA

Conifer Securities LLC
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1 Ferry Plz
San Francisco, CA

National Agents Alliance
559-240-5188
485 W Nees Ave #135
Fresno, CA

All Shores Sea Food Brokerage Pier 45
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39 Pier
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Associated Securities Corp.
(415) 433-5900
235 Montgomery St
San Francisco, CA

Casey Securities
(415) 544-9100
220 Bush St Ste 462
San Francisco, CA

Charles Schwab & Co. Inc.
(800) 435-4000
101 Montgomery St
San Francisco, CA

1st Discount Brokerage Inc.
(415) 357-1626
55 New Montgomery St Ste 526
San Francisco, CA

Adapted From: Annuities For Dummies

Technically, every annuity has two phases: accumulation and income. During the accumulation phase, you put money in the annuity account (paying all at once or making a series of payments), and it grows tax-deferred. During retirement, you initiate the income stage by converting it to an irrevocable income stream.

In practice, it usually doesn't work that way. Most people who buy deferred annuities never formally convert them to income; they just take withdrawals during retirement. And a handful of people buy immediate annuities after age 59-1/2 and start receiving income right away.

The purchase stage described below isn't an "official" contract stage. It's added to the beginning of the cycle to articulate the initial steps in acquiring an annuity.

1. The purchase stage (typically starting at age 45 or so):

Meet with a trusted agent/broker/adviser to explain your needs; give her time to research the annuity products available in your state.
Study the various prospectuses or brochures your broker obtains from the wholesaler, broker-dealer, or carrier; choose the best product.
Fill out the contract application; if it's a deferred variable annuity, choose the subaccounts (mutual funds), riders (options), and services you want.
Wait while your application is submitted to the insurance company for approval.
Sign the approved application and provide a check for the purchase premium.

2. The accumulation stage (lasting from purchase until after age 59-1/2):

Manage your subaccounts. If it's a deferred variable annuity, make periodic contributions; if it's a fixed annuity, wait until the term ends and, if you want, roll it into a new contract.
Take withdrawals if necessary, knowing that withdrawals may be subject to a surrender charge, income tax, and a 10-percent federal penalty tax if you are under age 59-1/2.
If you purchased a "guaranteed accumulation benefit," watch to see whether your account value surpasses or falls short of it. If your account balance falls short, you can exercise your option to take the guaranteed amount.

3. The income or distribution stage (starts at age 59-1/2 and lasts indefinitely). Do only one of the following:

Take withdrawals from your contract as needed without converting the assets to a guaranteed irrevocable income stream.
Exercise your guaranteed withdrawal benefit, if you purchased one, to receive a guaranteed income for life while maintaining access to your money.
Convert your annuity assets to a fixed or variable guaranteed income stream for one of the following: life; either of two lives; or a certain period.
Transfer the assets of your deferred fixed or variable annuity to an immediate income annuity and receive guaranteed income for one of the following: life; either of two lives; or a certain period.

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For Dummies is a registered trademark of Wiley Publishing, Inc. in the United States and other countries. Used here by license.

Featured Local Company

Bankers Life and Casualty

661-946-3903
950 E Palmdale Blvd
Palmdale, CA

Read more about Stages of Annuity Investments

- How To Purchase An Annuity California

There are basically two types of annuities. A fixed annuity earns a guaranteed interest rate over a specific period of time, while a variable annuity offers a much greater range of investment funding options than fixed annuities.

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Regional Articles

- Annuity California

Annuities are investment vehicles that usually provide tax advantages, some degree of investment security and some income for a period of time. The type of investment will determine whether it is a fixed or variable annuity.

- How To Spot Fake High Yield Investments California
- Substantially Equal Payments Relief California
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