Variable annuities at Schwab provide tax-deferred savings options
A variable annuity is a long-term investment issued by a life insurance company that may provide unlimited, tax-deferred growth potential, guaranteed1 lifetime income, guaranteed2 death benefit options, and a variety of investment options. Like other tax-deferred savings plans, a variable annuity helps you grow, protect, and manage savings in a tax-advantaged way.
View the key differences between variable annuities (non-qualified assets) and other tax-deferred retirement plans below:
|Variable annuities||IRA, Roth IRA, Keogh, 401(k)|
|Contribution free from IRS limits||Yes||No|
|Tax-deferred investment earnings||Yes||Yes3|
|Contribution reduces taxable income||No4||Potentially5|
|Distribution taxed as regular income||Yes||Potentially|
|10% federal penalty for distribution of earnings before age 59½||Yes6||Yes7|
|Defer start of distributions past age 70½||Yes||No8|
|Guaranteed* death benefit||Potentially9||No10|
|Guaranteed† living benefit||Potentially11||No12|
*Guarantees subject to the financial strength and claims-paying ability of the issuing insurance company, not Schwab.
†Same as above.
Schwab's Annuity Concierge Service for Advisors delivers specialized support
Schwab offers dedicated support of the variable annuities we provide through the Schwab Annuity Concierge at no additional cost. This team of licensed annuity professionals is available to assist through all phases of the annuity process: from helping you choose which annuity best fits your client, to supporting the 1035 exchange13 process, to ongoing servicing of existing annuity contracts. The Schwab Annuity Concierge completes the suitability assessment and other essential documentation to ensure each annuity is consistent with the financial goals and investment objectives you have established with your clients.
Schwab offers a choice of variable annuities
Schwab offers two variable annuities from well-known carriers that may provide unlimited, tax-deferred growth potential and a wide selection of professionally managed investment choices to help you tailor asset allocation plans to fit your clients' needs.
Visit the Introduction to variable annuity products offered through Schwab section of the Service Guide for a detailed comparison of both variable annuities we offer—Schwab Advisor Choice Variable Annuity (from Great-West Financial) and Pacific Odyssey Variable Annuity14 (from Pacific Life).