Variable annuities

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, guaranteed1 death benefit options, and a variety of investment options. Like tax-deferred savings plans, a variable annuity offers tax-deferral of potential growth. In addition, a variable annuity also offers options to protect income and/or money for loved ones through an optional death benefit.

View the key differences between variable annuities (non-qualified assets) and some common 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

Yes2

Pre-tax contribution

No

Potentially

Contribution reduces taxable income

No3

Potentially4

Distribution taxed as regular income

Yes

Potentially

10% federal penalty for distribution of earnings before age 59½

Yes5

Yes5

Defer start of distributions past age 72

Yes

No6

Guaranteed* death benefit

Potentially7

No8

Guaranteed* living benefit

Potentially9

No10

*Guarantees subject to the financial strength and claims-paying ability of the issuing insurance company, not Schwab.

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 fits your clients' needs, to supporting the 1035 exchange11 process, to ongoing servicing of existing annuity contracts. The Schwab Annuity Concierge licensed annuity professionals handles the actual sales, including completing 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—The Schwab Genesis Advisory Variable Annuity™ (from Protective Life) and Pacific Odyssey Variable Annuity (from Pacific Life).

Contact

Have questions?

Contact us by phone or via our online contact form to find a local representative.

877-687-4085

All inquiries are confidential.

Prospectus

Variable annuities are registered products that are sold by prospectus only. Prospectuses can be obtained by calling 888-667-2145 (option 2). Before purchasing, investors should carefully read the prospectus and consider its investment objectives and all risks, charges, and expenses associated with the annuity and its investment options.

(0121-0LTZ)
  1. Guarantees are subject to the terms and conditions of the contract and the claims-paying ability of the insurer and do not apply to the separate account or the underlying investment options available with this contract. Schwab does not provide any insurance guarantees.
  2. Roth IRA earnings are tax-free if the distributions meet certain requirements.
  3. Contributions reduce taxable income if the variable annuities were purchased in a qualified retirement plan, such as a 401(k), or an IRA. The decision to purchase an annuity within a qualified plan or IRA should not be based on the annuity's tax deferred accrual feature as this is already provided by the qualified plan or IRA itself.
  4. A regular IRA reduces taxable income only within certain income guidelines and under certain circumstances. A Roth IRA does not reduce taxable income.
  5. Subject to certain exceptions.
  6. Roth IRA owners may defer start of distributions past age 72 as Roth IRAs are funded with after-tax money and not subject to Required Minimum Distributions.
  7. Death benefit features may vary among variable annuity contracts and may be subject to an additional cost. Guarantees are backed by the claims paying ability of the issuing insurance company. 
  8. Assumes the IRA, Roth IRA, Keogh, or 401(k) is not funded with a variable annuity contract.
  9. Living benefit features may vary among variable annuity contracts and are subject to limitations, restrictions and an additional cost. Guarantees are backed by the claims paying ability of the issuing insurance company.
  10. Assumes the IRA, Roth IRA, Keogh, or 401(k) is not funded with a variable annuity contract.
  11. Section 1035 of the Internal Revenue Service code allows for the tax-free exchange of one annuity contract for another. Before initiating exchange of an existing annuity, there are a number of important factors to consider which could reduce or eliminate the benefit of the exchange. These include surrender charges on the existing contract, loss of guaranteed benefits, and differences in features, costs, services, and company strength. Consider surrender charges that may apply upon terminating an annuity contract. These charges may reduce or eliminate the benefits of a transfer.

Charles Schwab & Co., Inc. is a licensed insurance agency and distributes annuity contracts and other insurance products that are issued by leading insurance companies that are not affiliated with Schwab. Not all products are available in all states.

Variable annuities are long-term investments intended for retirement planning and involve market risk and the possible loss of principal. Any withdrawals prior to 59½ may be subject to income tax and a 10% federal tax penalty. Investments in variable annuities are subject to fees and charges from the insurance company and the investment managers.

Because a variable annuity's value will fluctuate depending on the performance of the underlying portfolios, an investor's units, when redeemed, may be more or less than the original amount invested. 

Annuities may be subject to insurance company limitations as referenced in the prospectus. Some annuities can be purchased as an individual retirement account and are therefore subject to IRS limitations.  

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance product and guarantees, including optional benefits and any fixed subaccount crediting rates or annuity payout rates, are backed by the financial strength and claims-paying ability of the issuing insurance company and do not protect the value of the variable investment options. They are not backed by the broker/dealer from which this annuity is purchased, the insurance agency from which this annuity is purchased, or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

Pacific Life variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA), and an affiliate of Pacific Life & Annuity Company, and are available through licensed third parties.

Pacific Life Contract Form Series: 10-17800, 10-178OR (state variations may apply). Rider Series: ICC19:20-1427, ICC19:20-1428. State variations to contract form and rider series may apply.

Protective and Protective Life refer to Protective Life Insurance Company (PLICO) and its affiliates, including Protective Life & Annuity Insurance Company (PLAIC). Protective Life does not offer or provide investment, fiduciary, financial, legal or tax advice or act in a fiduciary capacity for any client. Please consult with your investment advisory attorney or tax advisory as needed. 

Schwab Genesis Advisory is issued by PLICO in all states except New York where Schwab Genesis Advisory NY is issued by PLAIC. Securities offered by Investment Distributors, Inc. (IDI) the principal underwriter for registered products issued by PLICO and PLAIC, its affiliates. PLICO is located in Brentwood Nashville, TN; PLAIC and IDI are located in Birmingham, Alabama. Each company is solely responsible for the financial obligations accruing under the products it issues. Product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Schwab Genesis Advisory is a flexible premium deferred variable and fixed annuity contract issued under policy form series VDA-P-2006 (PLICO) and VDA-A-2006 (PLAIC). SecurePay Life benefits provided by rider form number VDA-P-6057 (PLICO) and VDA-A-6059 (PLAIC). Policy form numbers, product availability and product features may vary by state. Charles Schwab & Co., Inc. is the selling broker-dealer and insurance agency and is not affiliated with Protective Life Insurance Company (PLICO), Pacific Life Insurance Company or Pacific Life & Annuity Company. The contracts are sold exclusively by Charles Schwab & Co., Inc. ("Schwab") through its representatives. All individuals selling this product must be licensed insurance agents and registered representatives.