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Split-Funded Annuities

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A Split Annuity is not an annuity policy but a combination of two annuity products. A fixed period immediate annuity and a single premium tax deferred annuity. Structured in such away as to produce immediate tax-advantaged income for a guaranteed period of time and to restore your original principal at the end of that time period.

A Deferred Annuity is used to restore the original principal at the end of the guaranteed period. While the Immediate Annuity provides a guaranteed monthly income for the same time period.

Advantages of a Split Annuity 
1) Dependable Income: The Immediate Annuity can supplement your income by providing you with a safe, predictable, and guaranteed cash flow. Depending on your income needs, the Immediate Annuity can generate a stream of monthly income anywhere from five to twenty years.

2) Tax-Advantaged Income: Since a significant portion of your monthly income from the Immediate Annuity is considered a return of your original investment, it is tax-advantaged. In our example below, 81% of your monthly income payments would be not be taxed.

3) Tax-Deferred Growth and Principal Preservation: The Deferred Annuity portion of the split-annuity concept offers tax-deferred growth and you earn an interest rate that historically has been higher than average CD rates. In addition, your original principal is restored at the end of the guaranteed period which allows you to start the process over again at prevailing interest rates.

immediate annuity, immediate annuities Looking to buy a split annuity?  You'll need the services of a licensed insurance agent. To speak with the best annuity agents in the country, call Annuity Advantage at 1-800-239-0356. View Our Online
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Example of a Split Annuity
$100,000 Investment
Immediate Annuity
  Deferred Annuity
at 5.50%
  will grow
Monthly Income
Yr. 1 $61,763
Yr. 2 $65,160
Annual Income
  Yr. 3 $68,744
Yr. 4 $72,525
for 10 years
for which
  Yr. 5 $76,513
Yr. 6 $80,722
is not taxed
  Yr. 7 $85,161
Yr. 8 $89,845
Total Income
before Taxes

  Yr. 9 $94,787
Yr. 10 $100,000

Original Principal

Please note that the illustration is based on a guaranteed interest rate of 5.50% for 10 years.
Withdrawals from an annuity prior to age 59 1/2 may result in a 10% penalty tax imposed
by the IRS. Annuities are not FDIC insured.

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