Deferred, Fixed Indexed Annuity
WHY CHOOSE A FIXED INDEXED ANNUITY
A fixed indexed annuity is a long-term contract between you and
an insurance company that helps:
o Protect principal.
o Provide the opportunity for growth based on the positive
movement of an index.
o Generate guaranteed lifetime retirement income.
As you plan for retirement, reflect on Pacific Life's icon,
the humpback whale, which migrates thousands of miles each
year to distant feeding grounds for the purpose of sustaining its
o 20?56'9.6"N, 156?46'12"W life. When you retire, a Pacific Life fixed indexed annuity can help
you go the distance by providing a sustainable source of income
and strong guarantees. Consider adding a fixed indexed annuity
to your retirement strategy today.
All guarantees are subject to the claims-paying ability and
financial strength of the issuing insurance company.
Insurance products are issued by Pacific Life Insurance Company. Product availability and features may vary by state.
No bank guarantee ? Not a deposit ? May lose value
Not FDIC/NCUA insured ? Not insured by any federal government agency
HELP PREPARE FOR A SECURE RETIREMENT
As you develop your retirement strategy, you may be concerned with how you will grow your assets while keeping
principal protected against loss during market downturns. You also may be looking to generate guaranteed income to
last your entire life or to secure your financial legacy for loved ones.
Pacific Index Foundation is a deferred, fixed indexed annuity and may be right for you if you are looking for:
o Safety of principal.
o Growth potential without being invested in the market.
o Tax deferral.
o Access to your money.
o Lifetime income.
o A death benefit for beneficiaries.
The Power of Tax Deferral
Because an annuity is tax-deferred, interest 10 Years 20 Years
will compound without current income tax. $300,000
Your money grows faster because you don't $265,330
pay taxes on the interest earned until you
withdraw it or it is distributed to you. $200,000 $212,424
The graph to the right illustrates the $162,889 $195,169
benefits of tax deferral. A $100,000 initial $142,765 $139,703
purchase payment, compounded at 5% $100,000
annually over 10 and 20 years, grows with
taxes deferred. If the full amount is
withdrawn after 20 years and taxes are paid
on the lump-sum distribution, the amount
would be $212,424--more than the Tax-DTeafexr-rDeedfeOrrpetidoOnsptions Pretax TaxaAbflteeIrn-Tveasxtment
Pretax After-Tax Taxable
$195,169 accumulated in a taxable Taxable Investment Taxable
investment over the same time frame.
Tax-deferral assumptions: Hypothetical example for illustrative purposes only. Assumes a nonqualified contract with a cost basis of $100,000.
After 20 years, the full amount before taxes equals the purchase payments plus interest, $265,330. The amount withdrawn after taxes are paid
is calculated by taking the full amount and subtracting the cost basis; it is then multiplied by 0.68 (32% ordinary income-tax rate) and adding back
in the cost basis, for a total of $212,424 after taxes.
Assumes a 32% ordinary income-tax rate, assessed yearly on the taxable investment and at period-end on the tax-deferred example. Actual tax
rates may vary for different taxpayers and assets from that illustrated (e.g., capital gains and qualified dividend income). Actual performance of your
investment also will vary. Lower maximum tax rates on capital gains and dividends would make the investment return for the taxable investment
more favorable, thereby reducing the difference in performance in the examples shown. Consider your personal investment time horizon and
income-tax brackets, both current and anticipated, when making an investment decision. Hypothetical returns are not guaranteed and do not
represent performance of any particular investment. If Pacific Index Foundation withdrawal charges were included (9% maximum withdrawal
charge), the tax-deferred performance would be significantly lower.
Under current law, a nonqualified annuity that is owned by an individual is generally entitled to tax deferral. IRAs and qualified plans--such as
401(k)s and 403(b)s--are already tax-deferred. Therefore, a deferred annuity should be used only to fund an IRA or qualified plan to benefit from
the annuity's features other than tax deferral. These features include lifetime income and death benefit options.
What is a deferred annuity and how does it work? CDs are typically purchased from banks or credit unions. Fixed annuities are purchased from an insurance company. Interest earned on a fixed annuity is tax deferred while CD interest is taxed as ordinary income for the year it’s earned. CDs impose high penalties if you withdraw money before the maturity date. ...
Title: Pacific Index Foundation Client Guide
Subject: Fixed Annuity
Keywords: FIA, S&P 500, MSCI EAFE, index-linked options, cap, performance-triggered, PIF
Author: The Annuity Expert
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