Deferred Annuities
Contribute money now and defer your payouts until later—potentially decades later—depending on how far away you are from retirement.
A deferred annuity is an insurance contract that may provide retirement income over a specified period of time in exchange for an up-front lump sum payment or premium payments over time. Depending on how far away from retirement you are, you can defer your income stream until later to give your investment time to grow.
Deferred annuities are available with fixed or variable rates of return, so you can choose between a guaranteed stream of retirement income or the potential for market-driven returns.
Deferred annuities are available with fixed or variable rates of return, so you can choose between a guaranteed stream of retirement income or the potential for market-driven returns.
Explore Multi-Year Guarantee Annuities
A Multi-Year Guarantee Annuity (MYGA) lets your money grow at a fixed interest rate for a pre-determined number of years. Learn more on whether a MYGA could help provide balance to your portfolio.
Deferred annuity features
Deferred annuities are available with both fixed and variable rates of return so you can choose type one that aligns with your goals and risk tolerance.
Investment growth potential
In general, the longer you defer your annuity, the higher your payout could be. By delaying your payout, your money will have more time to compound and that could boost the payout you’ll be able to receive when you start withdrawing money.
Retirement income
A deferred annuity could help you build your retirement savings over time to provide a consistent income flow to help support your lifestyle in retirement.
Tax-deferred growth
Annuity earnings are tax deferred. That means they aren’t taxed while you’re contributing to it, and that may result in a higher account balance when you start to take income.
Deferred annuities are available with both fixed and variable rates of return so you can choose type one that aligns with your goals and risk tolerance.
Investment growth potential
In general, the longer you defer your annuity, the higher your payout could be. By delaying your payout, your money will have more time to compound and that could boost the payout you’ll be able to receive when you start withdrawing money.
Retirement income
A deferred annuity could help you build your retirement savings over time to provide a consistent income flow to help support your lifestyle in retirement.
Tax-deferred growth
Annuity earnings are tax deferred. That means they aren’t taxed while you’re contributing to it, and that may result in a higher account balance when you start to take income.
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Deferred annuity FAQs
Deferred annuities offer the opportunity for guaranteed income and growth potential.
How does a deferred annuity work?
A deferred annuity is an insurance contract that may turn your retirement savings into a guaranteed income stream. You may fund a deferred annuity with a lump-sum contribution or a series of payments over time. During the accumulation phase, your principal has the potential to grow tax-deferred until you start taking withdrawals at a future date you specify (once you turn 59 ½, withdrawals are federal tax penalty-free).
What are the differences between deferred and immediate annuities?
While an immediate annuity begins distributing your payments almost right away, your payouts with a deferred annuity are just that: deferred. You may fund a deferred annuity like an immediate annuity with a lump sum, but you have the additional option to fund the annuity with payments over time. You may begin taking money out of a deferred annuity federal tax penalty-free once you reach age 59½.
What is a single premium deferred annuity (SPDA)?
A single premium deferred annuity (SPDA) is a deferred annuity funded by a single, lump-sum payment, as opposed to multiple, recurring premiums. Because there is still a waiting period before the annuity can begin paying out, SPDAs have the opportunity to grow tax-deferred over time, unlike a single premium immediate annuity (SPIA).
What are the pros and cons of deferred annuities?
Deferred annuities offer several advantages, including a guaranteed income stream in retirement, along with the potential for tax-deferred growth and a death benefit option during the accumulation phase. But there are some tradeoffs. You’ll pay surrender charges if you tap into your funds before the surrender period ends.In addition to ordinary income taxes, there is an additional 10% federal tax penaltyif you withdraw any money before age 59½.
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Our financial advisors can offer personalized guidance to help create a financial strategy that’s right for you.
Investing involves risk, including the possible loss of principal. The prospectus and summary prospectuses of the variable annuity contract and underlying investment options contain information on investment objectives, risks, charges and expenses, which investors should read carefully and consider before investing. Available at Thrivent.com.
Holding an annuity inside a tax-qualified plan does not provide any additional tax benefits.
Guarantees based on the financial strength and claims-paying ability of the issuer.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
Holding an annuity inside a tax-qualified plan does not provide any additional tax benefits.
Guarantees based on the financial strength and claims-paying ability of the issuer.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
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