Fixed Annuities

If you need guaranteed retirement income, fixed annuities offer benefits that can help meet your goals.

What is an annuity?

Annuities are designed to help you meet long-term financial goals such as retirement savings and providing retirement income. They are often categorized by their primary function: growth and accumulation (a Deferred Annuity) or income (an Immediate Annuity).

LGFCU offers Deferred Fixed Annuities and Immediate Fixed Annuities, through SECU Life Insurance Company. Let's help you choose the one that's right for you.

Deferred Fixed Annuity

A Deferred Fixed Annuity* is often used to supplement your tax-deferred retirement savings. When you put money in a deferred annuity, your money will grow at a specified rate and taxes on the earnings are deferred until you withdraw some or all of your balance.

Interest rate information

  • Interest rates are subject to change daily.
  • The initial interest rate will be guaranteed for the guarantee period.
  • Afterward, interest rates are subject to change annually, but will not drop below the minimum guaranteed interest rate on the contract.

Withdrawal information

  • Withdrawals are subject to ordinary income tax.
  • Surrender charges may apply to withdrawals.
  • Withdrawals made prior to age 59½ may also be subject to a 10% federal tax penalty.

 

Deferred Fixed Annuity Questions

See footnotes for information on Form SPDA 0515.

How much money do I need to open a deferred fixed annuity?

$5,000

Can I use money from a retirement account like an IRA or 401(k) plan?

No. You can only open this annuity with non-qualified (after-tax) money from sources such as a checking, savings or money market account.

Can I make additional payments after it is opened?

No

Are there any age limitations?

Yes. You must be age 80 or younger to open this annuity.

Interest rate guarantee

5-year
Minimum: 1%
Contact us for current interest rate.

Can I withdraw money without paying a fee?

Yes. You can withdraw up to 10% of the current balance each year without paying a fee. However, withdrawals made before age 59½ may be subject to a 10% federal tax penalty.

What happens if I withdraw more than 10% a year?

If you withdraw more than 10% of the current balance during the 5-year period in which your interest rate is guaranteed, a surrender charge will apply. The surrender charge applies to any amount that exceeds 10% of the current balance and is assessed as a percentage that depends on the year the withdrawal is made. 

Year 1: 5%
Year 2: 4%
Year 3: 3%
Year 4: 2%
Year 5: 1%

This amount is in addition to any federal tax penalty assessed for withdrawals made before age 59½.

Immediate Fixed Annuity

If you want a guaranteed retirement income, an Immediate Fixed Annuity can be used to convert a portion of your retirement savings into guaranteed retirement income that you cannot outlive. This income can be used to cover your fixed expenses in retirement and may offset your risk of outliving your savings. All guarantees are subject to the claims paying ability and financial strength of SECU Life Insurance Company.

Immediate Fixed Annuity Questions

See footnotes for information on Form SPIA 0515.

How much money should I use to purchase an Immediate Fixed Annuity?

The amount of money you use to purchase an Immediate Fixed Annuity depends on your retirement income needs. Determine your fixed retirement expenses, such as food, housing and health care. Then determine your guaranteed retirement income, such as Social Security and pension. If your fixed expenses exceed your guaranteed retirement income, you may want to consider using a portion of your savings to purchase an annuity to cover those expenses.

Are there any age limitations?

Yes. You must be age 90 or younger to purchase the Immediate Fixed Annuity.

What income payment options are available?

You can choose to receive income payments either tor your lifetime, and if elected, the lifetime of your spouse, or for a fixed period.

What happens if I pass away earlier than I expected?

If you choose an income payment option with a fixed period and you pass away before the end of the period selected, your beneficiaries will receive income payments until the end of the period.

How are the income payments determined?

The income payments you receive are based on your age, gender, the amount you pay for the Immediate Fixed Annuity, and the income payment option you select.

Next Steps

Contact us to determine if a fixed annuity is right for you.

*All annuity guarantees are subject to the claims paying ability and financial strength of SECU Life Insurance Company. Reference Form SPDA-0515.

LGFCU offers simplified deferred and immediate annuities to members through SECU Life Insurance Company (SECU Life), Raleigh, NC, a wholly-owned subsidiary of State Employees’ Credit Union. Annuities are not guaranteed by, or an obligation, of any credit union and are not insured by NCUA. Insurance Representatives are licensed to sell in North Carolina only. Reference Form SPIA-0515.