State Farm Annuities

Annuity Basics

Investors are on a seemingly endless quest for a safe haven for their retirement dollars. Selecting the best investment depends on your financial goals and market conditions. Fixed annuities are low-risk investments that can help you reach those goals.

How Deferred Annuities Work

Accumulation Phase

During this phase, the customer pays either a lump sum or makes periodic payments to the insurance company. These payments accumulate at interest over a period of time, similar to a savings account. However, unlike most other savings vehicles, interest is earned on a federally income tax-deferred basis. This tax advantage is one reason annuities have become important retirement planning tools (Although income tax-deferred, taxes will become due when funds are withdrawn).

Distribution Phase (Income Payout)

Income payments can be made monthly, quarterly, semi-annually, or annually. The amount of these income payments is based upon the accumulation value when payments begin, the age and gender of the annuitant,* and the income option selected. If the annuitant selects one of the life income payout options, guaranteed payments will continue for the rest of his or her life.
* Unisex rating applies to certain tax-qualified plans and policies issued in Montana.

Sounds simple, right? And yet there's a lot of confusion and misinformation out there when it comes to annuities. At State Farm® we're committed to providing you with the answers you need to make confident, well-informed choices when it comes to your future.

Learn more
Types of Annuities
Tax-Qualified and Non-Tax Qualified Plans
Annuity Mythbusters