What is a 7-Year Non-Qualified Annuity?

February 23, 2023

What is a 7-year non-qualified annuity, and how does it work for someone looking for a long-term insurance plan? Retirement planning is a mystifying ordeal for many people. It can become even more confusing when you start to research the different types of retirement strategies and try to determine which one is right for your needs. One of the options you’ll encounter, an annuity offers investors income after retirement.

The Basics About Annuities and the 7-Year Non-Qualified Annuity

You might be wondering — how does a 7-year non-qualified annuity work? Read on to learn more about this type of retirement strategy.

How an Annuity Works

The promise of consistent income after retirement is certainly a promising prospect. To enjoy this benefit, you must first understand exactly how an annuity works. Annuities rely on a contract between you and your insurance company. This contract authorizes the insurer to invest your funds until you reach retirement age. At this point, you can collect regular payments and subsidize your living expenses after you retire.

Types of Annuities

Although all annuities employ the same basic framework, many options exist. Immediate annuities offer lifetime guaranteed income, fixed annuities minimize risk, and deferred annuities offer tax benefits. Another option — non-qualified annuities — offer their own unique benefits. This type of annuity is drawn on post-tax income. It allows investors to contribute to their annuity and offers tax-free income payments once distribution begins.

Benefits of an Annuity

The benefits of an annuity are apparent, but there are still many advantages you may need to be aware of. Regardless of what kind of annuity you choose, the income includes tax-deferred growth and the ability to transfer funds to beneficiaries after death. It makes annuities a fantastic choice for retirees who want to protect their future while ensuring they can provide for their loved ones. An annuity’s contract will specify the sum of its death benefit.

How To Optimize an Annuity

With all of the benefits an annuity offers, it’s an attractive option for anybody who wants to start saving for retirement. To get the most out of this retirement strategy, you must understand how to optimize its potential. Many financial experts recommend a strategy that’s called laddering. It refers to the practice of buying multiple annuities at varying interest rates. Likewise, it allows you to stagger the payout dates so that the annuities you invest in have more time to accumulate value.

Investing in an Annuity

How do you get started saving for your 7-year non-qualified annuity? The most integral part of this process is partnering with a company you can trust. It is essential because your insurer will determine the interest rate on your annuity, and they can also help you integrate your annuity into a big-picture retirement plan. Reach out to a trusted annuity agent to learn more about annuities and get started on your retirement plan today.

About 1891 Financial Life

At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.

Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.