PERSONAL FINANCE FAQS

Annuities are a long-term investment.  A fixed annuity provides slower growth, but has a fixed rate of return.  A variable annuity may have more potential for growth and gives you more control over what is done with your money, but the element of risk can be greater.

It depends.  Most annuities do not charge you a fee for a certain number of withdrawals, up to a specified percentage of your annuity value.

Yes, most annuities allow you to make a full or partial withdrawal at any time, although there may be a cost for doing so.  Some annuities do not allow withdrawals until the end of the term. Withdrawals prior to age 59 1/2 may be subject to a 10 % federal tax penalty in addition to ordinary income taxes.

Annuities complement other forms of investing.  Annuities are generally tax deferred, which may allow them to grow faster, since earnings are reinvested without being diminished by the effects of taxation.  You are allowed to contribute as much non-qualified money as you would like to an annuity, unlike other tax-qualified plans that limit the amount you may invest.

These insurance companies and annuity marketing companies paid Wachovia Securities for marketing and/or other service fees in 2005: AIG SunAmerica, American Express Financial Group (American Enterprise Life), AXA Distributors, Genworth Financial, Hartford, ING, Jackson National Life Insurance Co., Lincoln Financial Group, John Hancock (Manulife USA), MetLife Investors, Nationwide, Ohio National Financial Services, Omnia Life (Bermuda) Ltd., Pacific Life, Prudential Financial/American Skandia, Scudder Investments, MFS/SunLife Financial, Transamerica Life Insurance, Travelers Life and Annuity, USAllianz.

A contract between an insurance company and the annuity purchaser.  An annuity allows for tax-deferred accumulation of the premium amount during the accumulation phase, and a variety of payout options during the annuitization phase.